Allied Irish Banks confirmed today it will seek 2,500 redundancies, 500 more than initially signalled, in a bid to cut annual payroll costs by €170 million.
The State-controlled lender said it hoped the redundancies could be achieved on a voluntary basis, with half the proposed departures to be finalised this year.
AIB said it would announce the terms of its proposed redundancy programme in early April on conclusion of a consultation process with unions.
“We aim to implement a severance package that is fair to people at all levels in the bank, while reflecting the very difficult financial position that AIB is in and the huge taxpayer support on which we continue to rely,” newly appointed chief executive David Duffy said.
However, the Irish Bank Officials’ Association, which met with AIB management this morning, said the proposed cuts would have a devastating impact on ordinary employees and their families.
“Although we have been expecting an announcement on the bank’s restructuring plan for some time, the scale of the proposed job losses means that ordinary bank staff are being asked to suffer the consequences of the mismanagement of the bank’s affairs to a disproportionate extent,” said IBOA general secretary, Larry Broderick.
Siptu's finance sector organiser Adrian Kane said the number of redundancies being sought was "unacceptably high".
After a meeting with AIB management today, Mr Kane said the union would be examining the bank’s restructuring programme and fighting to maintain as many directly employed jobs as possible.
Siptu members would not accept redundancies that were the result of outsourcing or displacement of jobs at AIB.
The IBOA also met with officials from the Department of Finance to discuss the likely terms of the redudancy package.
The Government has injected €20.8 billion into AIB and its subsidiary, EBS, taking a stake of more than 99.8 per cent in the bank.
Taoiseach Enda Kenny said it was a difficult day for the workers concerned but that he hoped they could find a future in Dublin’s IFSC as it aims to add 10,000 new jobs over the next five years.
“I would hope that some numbers of those who worked in AIB would be able to gravitate to that sector,” he said.
It is understood bank management is under pressure from Government to ensure pay-off arrangements do not exceed packages already offered to Health Service Executive workers this year - three weeks’ pay for every year of service on top of two weeks’ statutory redundancy.
Irish Bank Resolution Corporation, the nationalised lender that was formerly Anglo Irish Bank, set a cap of €175,000 on payments made to staff under a redundancy package last year.
The bank confirmed it was working within Government rules and wanted a speedy conclusion.
“The programme forms an important part of AIB’s return to sustainable profitability, allowing the bank to focus on its customers and support Ireland’s economic recovery,” it said.
The bank said it would not be making any further public comment until the consultation process with staff representatives was concluded.
Tánaiste Eamon Gilmore earlier told the Dáil that the bank hoped to achieve the redundancies on a "voluntary, early retirement basis''. His first concern, he added, was with the bank's employees because it was upsetting news for them.
Fianna Fáil TD Dara Calleary said that AIB was saying it would seek compulsory redundancies if they could not be achieved on a voluntary basis. Those involved, he said, were frontline people who had taken much of the brunt of the economic downturn.
"It was completely inappropriate that employees should have heard about it in Bloomberg business news," said Mr Calleary, referring to a leak that was broadcast on the agency's news wires yesterday.
AIB is the latest bank to announce a major restructuring of its operations here following Ulster Bank's announcement in January that it was seeking to cut 950 staff.
