EBS Building Society, a subsidiary of AIB, is set to cut its workforce by a third as it franchises out the last of its branches. The 200 redundancies will be sought on a voluntary basis and will be split equally between the building society’s head office in Dublin and its 14-strong branch network.
The building society currently has 82 offices in the Republic, made up of 14 branches and 68 tied agents or franchises. However, as part of the move, EBS will look to hand over the responsibility for these 14 branches to tied agents, which will then run the operations themselves.
Branch managers
Typically in such an agreement, the agent would take on the costs associated with running an operation, such as staff, rent and lighting, earning a commission from the institution with whom it is tied on products sold. Marketing and training support might also be supplied. It is possible that EBS’s existing branch managers will opt to become tied agents of the building society and stay on to run the branches.
As part of the redundancy programme, staff will have the option of either staying with the newly appointed tied agent, applying for a transfer to AIB or applying for redundancy.
EBS will continue to operate its business under the EBS brand, and will distribute its mortgage and savings products through these tied agents. The building society is now set to write to customers of the effected branches to inform them of the change.
The move is part of AIB’s overall voluntary severance scheme, announced last year, which is aimed at saving in excess of €200 million by reducing the group’s headcount by 2,500.
Staff at EBS will be offered the same redundancy terms as those at AIB, ie three weeks’ pay per year of service, plus the statutory entitlement of two weeks’ pay, or four weeks’ salary per year of service, inclusive of statutory, up to a maximum of €225,000.
As of Christmas, some 1,700 staff had left AIB, with a further 800, including the 200 announced yesterday at EBS, set to leave by 2014.
The Unite trade union, which represents workers at the building society, said the move by EBS was “ripping the heart out of what was once an institution of the people”.
