Allied Irish Bank (AIB) is to lay off 2,500 workers, the bank announced Thursday.

The bank said half of the redundancies, 500 more than it previously proposed, should occur this year.

According to the Belfast Telegraph, AIB chief executive David Duffy said the bank aimed to provide reasonable severance packages for staff.

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, Duffy said.

I am confident that AIB will achieve sustainable profitability with a reduced cost base essential to delivering this recovery.

Allied Irish hope the redundancies will to cut €170 million ($225 million) in operating costs.

According to the Belfast Telegraph the Irish government is thought to be pressuring Allied to keep severance packages in line with those offered to Health Service Executive workers.

Those deals included three weeks' pay for each year worked and two weeks statutory redundancy.

Allied Irish narrowly avoided coming under state ownership after receiving a €20.7 billion ($27.4 billion) bailout loan.

The Irish Bank Officials Association (IBOA) said talks would open with AIB senior management next week, Britain's Independent newspaper reported.

This continuing haemorrhage of jobs in the financial sector shows no signs of abating, IBOA general secretary Larry Broderick said, according to the paper.

We need a realistic strategy to strengthen existing employment and create alternative opportunities.