The largest Irish lender by market value will reduce its workforce by about 5 percent through voluntary layoffs, the Dublin-based bank said in an e-mailed statement today.
Ireland’s government injected 3.5 billion euros
($4.6 billion) into the bank last year as bad debts surged after the country’s decade-long property boom collapsed. The European Commission yesterday approved the lender’s restructuring plan, which includes disposing of New Ireland Assurance, its life and pensions division, Bank of Ireland Asset Management and ICS Building Society.
“This redundancy plan is the next logical step for the group,” said analyst Ciaran Callaghan at Dublin-based NCB Stockbrokers, who rates the shares a “buy.” “We cannot rule out further job losses in the future and expect the other Irish banks to follow suit over the near term.”
The bank said it will continue existing pay freezes until a review in April. Another review is scheduled for December 2011, it said.
Leaders of labor unions at the lender said they will meet next week to prepare to “engage” with the bank’s management.
The Irish Bank Officials Association “will be scrutinizing any specific proposals for job reductions with a view to securing alternative arrangements,” Larry Broderick, general secretary of the union, said in an e-mail statement. “It is incumbent on senior management to learn the lessons from past mistakes.”
The bank had 14,636 employees at the end of December, according to its annual report. About 2,200 people have left the lender since March 2008, mostly as a result of the company not replacing employees as they left.
Bank of Ireland fell 2.5 percent to 69 cents at the 5:10 p.m. close in Dublin. The shares have fallen 28 percent over the last six months.
--Editors: Steve Bailey, Dylan Griffiths.
