Allied Irish raises job cut target to 2,500

By @ibtimes on

Allied Irish Banks said it has begun talks with unions to axe 2,500 jobs, 500 higher than previously announced, in the latest blow to the country's struggling workforce.

AIB, which has been effectively nationalised and saved from collapse by emergency European Central Bank funding, said on Thursday it would look to reduce its staff cost base by 170 million euros per year.

Half of the departures will be finalised by the end of the year, it added in a statement.

AIB said last year it would cut over 2,000 jobs during 2011 and 2012 on a phased basis out of a staff of over 14,000 in Ireland and the UK.

It will seek voluntary redundancies in the first instance, the bank added, but will need to consider other options in due course.

Dublin has pledged to radically shrink its banking system as part of an EU-IMF bailout and AIB will be one of two so-called pillar banks left from what was once a crowded field.

AIB said full details of the programme will be announced in early April.

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, said AIB's chief executive David Duffy.

Irish media reported that the terms of the severance package were a lot less generous than earlier schemes.

The finance union IBOA said the move was a devastating blow to staff, despite news of the bank's restructuring plan being awaited 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, said IBOA General Secretary, Larry Broderick.

Shares in AIB were up 13.6 percent at 10.39 a.m

(Reporting by Lorraine Turner; Editing by Mark Potter)

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