Bank of Ire­land to fol­low job cuts agree­ment

The Irish Times - Business - - FRONT PAGE - JOE BRENNAN

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.

Cost-cut­ting tar­gets

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.”

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