AIB to cut 2,500 staff jobs

AIB bosses are finally about to start slashing an estimated 2,500 jobs.
And sources within the bank say an announcement about the cuts could be made as soon as Tuesday morning.
This is when, at the bank’s HQ in Dublin’s Ballsbridge, its delayed annual results will be published.
It is believed that AIB CEO David Hodgkinson will then make his first public statement on the future for 15,000 bank workers in Ireland and the United Kingdom.
He has already warned staff about job cuts and said that for the bank to survive ‘it will require change of a magnitude never before undertaken by AIB’.
The bank is believed to be looking to make just over 2,500 job cuts but is hoping the majority of them will be voluntary redundancies.
A behind-the-scenes restructuring process has already concluded the cuts to staff are necessary if the bank is to survive, whether or not it ever merges with the EBS.
The bulk of the cuts are expected to be made between now and the beginning of next year. As well as staff jobs going across the board, the bank is also expected to close branches.
An AIB spokesman last night refused to comment about job cuts, or on speculation that €500,000-a-year Hodgkinson will make a statement about them on Tuesday.
A source who asked not to be named said last night: ‘There is an indication that as many as 2,500 jobs will go mainly from its Irish-based operations.
‘Hodgkinson is deliberately keeping his cards very close to his chest on this one, but his recent warning to staff has set alarm bells ringing.
‘We are all expecting a massive round of cuts.
‘Most will involve people losing their jobs outright, while others just won’t work for the bank anymore and will instead be left to the mercy of whoever buys AIB subsidiaries that go up for sale.’
They added: ‘The staff are sick and tired of the constant wait for news and some have heard this is likely on Tuesday.’
Last night, a spokesman for the finance union IBOA said last night: ‘IBOA is seeking agreement from the bank that any redundancies will be implemented on a voluntary basis.
‘And we would want this to be with full negotiation on severance terms with the union.
‘IBOA also wants an agreement on the terms and conditions of staff who will remain with AIB including any transfers and redeployment required under the restructuring of the Group.’
In an email to staff last month, Hodgkinson warned: ‘While there will be job losses, most will be brought about on a phased basis throughout the organization.
‘Our preferred approach is that most redundancies will be achieved on
a voluntary basis.’
Hodgkinson also told staff the bank’s ‘strategic review’ was in its final stages – having been passed to the AIB board.
Department of Finance officials are also believed to be in possession of the report into the review’s findings – and decisions about the bank’s future operations.
Hodgkinson warned that for the bank to survive its current crisis ‘it
will require change of a magnitude never before undertaken by AIB’.
Despite reports last year speculating on the amount of jobs cuts, the bank had always maintained no definite decision about the scale of cuts would be made until after bank stress tests were completed.
Those are now finished, with the Central Bank revealing on March 31 that AIB, Bank of Ireland, EBS and Irish Life & Permanent need an extra €24billion.
AIB will need €5.2billion, this is on top of the €3.5billion it received from tax-payers in 2009 as well as last year’s €3.7billion.
AIB is one of three Irish banks undergoing a new round of European stress-testing.
The other two being stress-tested by the London-based European Banking  Authority are Irish Life & Permanent and Bank of Ireland.
Although results are due in June, it’s worth noting that both AIB and Bank of Ireland passed their EBA stress tests. Two months later they needed to be bailed out again.
IBOA General Secretary, Larry Broderick said at the time that the contents of Hodgkinson’s email had been news to staff and the union.
‘This announcement comes as a surprise to both the staff and to the Union since at no stage in our recent engagement with the Bank has there been any indication that the plan was at such an advanced stage,’ he said.
The Union has been involved in preliminary discussions with the Bank under the auspices of two respected mediators.
‘But at no time ‘were either we or the mediators made aware that the bank was about to submit a comprehensive restructuring plan to the board and to the Government.’
Speculation about job cuts has been rampant since the beginning of the
banking crash in 2008.
AIB confirmed last Friday that the State now owns a 92.8% stake in the bank. This follows the completion of the sale of its Polish businessesBank Zachodni WBK and BZ/WBK AIB Asset Management.to Santander in Spain.
Despite upping its stake from 49.9% with last December’s €3.7billion bailout, the Government agreed to wait until the sale was finalised to formally declare its stake holding.
It has also finished converting the 10.5million convertible non-voting shares it received in return for the €3.7million in December into ordinary stock.