AIB plans to slash expenses and cut staff to overcome financial crisis

Last updated Dec 3, 2020

DUBLIN: AIB is planning to cut expenses and cut staff to overcome the financial crisis. Although the strategy was announced earlier, it was temporarily halted due to COVID-19. However, the AIB has stated that the decision is to continue to cut jobs and to vacate offices.

The AIB confirmed that the decision was to cut 1,500 jobs and to vacate three of its six Dublin head offices. The bank also plans to merge five overlapping branches in three urban locations. Meanwhile, there has been criticism from the unions against the move by the government bank.

The bank says it will vacate three Dublin offices whose leases expire in the next three years. Earlier this week the bank had vacated its former headquarters at the Bankcentre in Ballsbridge. It will also leave a nearby premises at Hume House by the end of the year. Five overlapping branches will be merged in Dublin, Cork and Galway by the first half of next year.

In Dublin, AIB’s Westmoreland Street branch will relocate to the Dame Street branch and the Crumlin Cross branch activities will transfer to Crumlin Road. The operations of 52 Baggot Street will move to 1-4 Baggot Street. In Galway, Eyre Square will move to Lynch’s Castle. The Patrick Street branch will be merged with the 66 South Mall in Cork.

Earlier this year, the bank announced plans to cut 1,500 staff over three years to cut costs and increase dividends. However, with the onset of the COVID-19 pandemic, that move was halted. But AIB chief executive Colin Hunt reiterated the bank’s goal of moving forward with a decision to cut staff by 2023. The CEO explained that this goal could be achieved through a combination of regular retirement, natural exit and self-retirement. The voluntary retirement program, which has been suspended since March, will come into effect in early 2021.

Trade unions have protested against the bank’s move to go ahead with its decision to lay off employees. The Financial Services Union has demanded that the plan should be postponed. “We are still in the middle of a world -wide pandemic. No major announcements on job cuts should be made at this stage, particularly by a Bank that is part owned by the Irish Government,” said General Secretary John O’Connell.

AIB says that the interest and preference of customers for digital banking has accelerated with the advent of COVID-19. This is the reason behind the cut in office operations, the bank said. The bank said it will cut costs by 10% more than announced earlier this year to meet capital and profitability targets by 2023.

The bank says Ireland had one of the longest lockdowns in Europe. This put the mortgage bank in even more crisis. The COVID-19 lockdown forced Ireland’s largest mortgage lender to set aside €1.3bn in impairments.