AIB to get rid of 1,900 staff by December 2013

AIB is to get rid of the first 1,900 of its 2,500 staff departures by Dec 2013, with the rest to go in 2014.

Since it announced it was seeking the significant job cuts earlier this year, the bank is understood to have received a large number of applications from people willing to either take voluntary redundancy or early retirement.

Due to the numbers wishing to avail of the latter option the bank has extended for acceptance of early retirements from Dec 2012 to Dec 2013.

Managers are expected to begin telling their staff today whether their application has been successful.

Those whose application for either voluntary redundancy or early retirement was turned down at this stage will be able to apply again next year.

The first round of departures are expected to take place at the end of next month.

The terms on offer were agreed at the Labour Relations Commission under Kevin Foley.

He recommended the bank offer four weeks’ of pay per year of service, including statutory entitlement, or three weeks’ pay per year of service plus statutory entitlement, subject to a payment cap of two years annual salary.

The early retirement scheme was available for staff aged 50 and over but was to be on a pro rata actuarially reduced basis.

The bank is facing industrial action over planned cuts for those staff who remain.

Last month chief executive David Duffy announced plans to extend a pay freeze for staff until 2014 and move them to a defined contribution scheme from the current defined benefit scheme.

The plan would also see top executives’ pay cut by 15%, other executives take a 10% cut, and senior managers take a 7.5% wage reduction.

Finance union IBOA balloted its members before revealing the bank’s staff “are virtually unanimous in their rejection of the cuts package”.

It warned they were prepared to go on strike if management imposed its planned cost-cutting measures.