Bank of Ireland to follow job cuts agreement
Bank of Ireland’s chief executive Francesca McDonagh has committed in a meeting with Financial Services Union (FSU) officials to sticking to an existing restructuring arrangement, as analysts estimate that the group will cut more than 2,000 jobs over the next three years.
The FSU has advised its members in Bank of Ireland that Ms McDonagh, group chief executive for the past 14 months, pledged to adhere to the so-called change management agreement, dating from 2012, which commits to voluntary severance, redeployment and protection of terms and conditions of employment should restructuring be necessary.
“We have no doubt that roles will change over the coming years – banking is changing greatly,” said Gareth Murphy, the FSU’s acting general-secretary. “We agreed that much more focus needs to be placed on long-term job security through re-skilling and training before restructures would even be required.”
Ms McDonagh outlined last June that the bank was setting aside €250 million for restructuring, including redundancies, as she expanded the scope of the group’s ongoing information technology (IT) overhaul and transformation programme. The four-year programme is now expected to cost €1.4 billion, up from an estimate of €900 million when it was originally unveiled in 2016 by her predecessor, Richie Boucher.
The terms of the current agreement on voluntary redundancies provides for departing staff to receive three weeks’ pay, plus two weeks’ statutory entitlement, for every year of service, with total payoffs capped at two years’ salary per individual. It also contains early-retirement provisions.
Analysts at Investec in Dublin have estimated that the bank’s cost-cutting targets, also unveiled in June as part of a so-called capital markets day series of presentations to investors, suggest that the group, which had 10,892 employees at the end of 2017, may cut its workforce by 15-20 per cent, equating to up to 2,200, by the end of 2021.
The bank’s staff count has dropped by more than 30 per cent from 16,000 in 2008.
A spokesman said: “Our sector, and how our customers bank, is changing and will continue to change into the future. We will manage this appropriately and closely with our people and with the FSU, as we have always managed change in the past.”