AIB staff may face pay cuts after 2,500 jobs shelved

The 12,500 staff who remain at AIB after the 2,500 job cuts announced yesterday could face possible wage reductions once the dust settles.

Sources within AIB refused to rule out cutting staff wages, closing branches and seeking compulsory redundancies if the bank is unable to achieve the €170m required cost savings under the bank’s latest redundancy programme.

Finance union IBOA general secretary Larry Broderick said AIB was asking the ordinary workers to bear the brunt of the fallout from the bank’s mismanagement.

“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,” he said.

AIB chief executive David Duffy told staff the bank was engaging in a cost review process across all sectors of its business.

When this review was finished, the bank would make further decisions on branch closures, redeployment of staff and wage levels.

Mr Duffy indicated in correspondence with staff that he couldn’t rule out wage cuts.

Mr Duffy said that due to the difficult trading circumstance the bank finds itself in, he was planning to review all wages and benefits paid to staff.

Mr Duffy said the bank would need to impose pay levels that reflected the environment in which it was operating.

Industry sources said wage costs made up more than 50% of the bank’s operating costs.

In 2010, the operating costs for the bank were €1.65bn and €900m of that was staff costs.

Mr Duffy said the reduction in staff numbers would be achieved on a voluntary manner over the next two years.

“We will work hard to ensure that the reduction in staff numbers is achieved on a voluntary basis and there will be as much consultation and dialogue with staff and their representatives as is needed,” he said.

Mr Duffy added: “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.”

Workers at EBS building society, now a subsidiary of AIB, sounded what the union conceded was a militant tone when they said they would wait and see before deciding whether or not to take any action.

Unite regional officer Colm Quinlan, speaking on behalf of ESB staff, said: “We will continue toengage directly with EBS management and anyimpact of yesterday’s announcement must beaddressed in that forum through established agreements and procedures.

“Having shown a willingness to fight for fair treatment our members will certainly not wish to be taken for granted.”