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This is hardly something to gloat about, but our prediction that AIB was to make 2,000 redundancies has proven prophetic.
The bank confirmed in its preliminary results for 2010 that “a reduction of 2,000 staff will take place on a phased basis over 2011 and 2012″ on the back of a record loss of €10.4bn last year. The redundancies are expected to be voluntary and, according to initial statements from chairman David Hodgkinson, will be spread across the organisation.
The bank employs around 14,600 people, so the cuts represent 14% of total headcount.
The overall redundancy figure may seem fairly brutal – IBOA president Larry Broderick has described it as the equivalent of a major multinational company pulling out of Ireland – but they’re not huge considering the losses and the cuts already implemented.
Over the last two years, more than 1,300 staff have left AIB (excluding the sale of its Polish unit) – 400 last year and 900 in 2009 – and considering its need to rapidly slim down, the cuts could have been deeper.
It’s also worth noting that the 2,000 figure doesn’t include any potential fall out from AIB’s merger with EBS, which sources suggest could number “several hundred” more redundancies.
While undoubtedly some redundancies will hit its capital markets functions, the majority are likely to occur in its group functions (as it sells off non-core assets) and AIB RoI, which employs over 7,000 staff.
Pay and staff numbers falling in capital markets
Perhaps the real question is whether it can keep hold of staff in its capital market division.
It wasn’t a great year for AIB capital markets; it posted a profit of €71m, or a 57% reduction on the €468m in 2009. This was largely down to a €268m loss in corporate banking, but even global treasury’s €344m profit was a 19% slide on 2009.
Although it admits that staff numbers in capital markets have declined, AIB has yet to break out employees by division. While there are rumours that turnover in its capital markets division has been high, this is unlikely to account for the 42% slide in personnel expenses.
Instead, it suggests that the clampdown on bonus payments has hit home and the internationally mobile capital markets staff are unlikely to stick around in the face of such drastically reduced compensation.
A friend of mine has an aunt who retired from the AIB a few years ago and the AIB continue to pay her annual subscription to her golf club. Some gravy train that AIB.
Sloppy Journalism this
Prophetic – “Accurately describing or predicting what will happen in the future.”
This was well flagged before March 17 2011 article on efinancial.ie
Turnover – “the ratio of the number of workers that had to be replaced in a given time period to the average number of workers.”
Staff were not replaced.
“Let go of …Staff” staff left AIB – they were not let go.
Profits were down because the bank has a lower risk profile – the fact there were still profits shows the professionalism of individuals.
The Exodus of staff has more to do with the future job security than a bonus – most can live well on the basic wages.
Voluntary redundancy? That is a good way to ensure that the good people leave and the dead wood remain. Of greater interest to me though is what “package” they intend to pay – statutory I presume.
If the bank ultimately becomes – in Michael Noonans words last week – a domestic bank – then 2000 is only the start of it.
Mr Hodkinson has not been open or honest with staff to date. He is a George Clooney flown in to reduce headcount and bring the staff down to the size of domestic institutiuon.
No domestic financial institution in the country is going to need in excess of 10000 staff.
This is merely the first cut.
one can picture the scenes being played out all over Bankcentre as the lick butt, bum wipers and pocket-grabbers clench on to their bosses in desperation, the fear of getting the tap on the shoulder and told to bow down to the exit sign.
Those same pocket grabbers were the see no evil, speak no evil say no evil cronies who were consumed by bonus payments and not the monumental failures by their management pals.
No senior managers, no executives, no general managers, all sub-board directors and audit commitee members and main bank board directors who were in situ 2005 onwards cannot stay on. Like rats on a sinking ship the spin and spoof that the staff of Capital Markets were some how not responsible for the destruction of the parent company is sad and again shows the lack of duty and care to AIB shareholders. Nobody amongst the big hitters, monster bonus payment recipient like Colm Doherty never told Sheehy to step back from the battle with Anglo. Fit n proper idiot.
I feel sorry for all those under 30 working in branch banking in AIB. They get the abuse , They didnt sign off on multi million and billion euro loans, yet are the most likely to join the 500,000 on the dole.
plenty of retail branch personnel signed off on stupid loans all over the country to increase their annual branch lending bonus, there are few innocents in this game
I’m with Bini Smaghi – there is no one in Ireland who did not benefit partially when the boat was rising.
Profits came in, people patted each other on the back – and everyone enjoyed the spoils.
Everyone will claim it was not them but the reality is – in the good times everyone benefitted.
Social welfare recipients in the good times took the cash – one of the biggest drains of all time on a sovereign state – long term unemployed never give anything back, cost billions annually. Get free rent, social welfare, and their children raised for them.
Pensioners gained – receiving among the best pensions in the world – they give very little now – refuse to pay for their passports to leave the country. Lets be honest – a retired couple do not need over 400 euro a week cash when their grandchildren are paying for it.
Everyone took – and now the boat is sinking it is the people left working who are giving back.
The country is a longwinded excuse from a default. Dont blame the man in the bank.