AIB encouraging senior departures ahead of Q1 restructuring

7 December 2010

2 minute read

AIB encouraging senior departures ahead of Q1 restructuring

AIB seems to be cutting costs where it can before the seemingly inevitable redundancy announcement early next year by encouraging senior managers to accept early retirement.

Up to 40 second and third tier managers have applied for early retirement within the last month, according to reports in the Sunday Tribune, and some senior executives are also believed to be taking the same route.

The impetus appears to be a desire to avoid higher post-budget taxes on their pension, due to be implemented next year. However, it's also likely - despite the move being described as an "exodus of talent" - that they may have been encouraged by the bank itself.

Despite the looming spectre of full nationalisation, AIB has held off making redundancies. Instead it's been relying on natural attrition, including encouraging early retirement, to reduce its headcount by 600 over the last year.

Moreover, the revelation proceeds what now seem to be inevitable redundancies. Following on from his comments that the bank would be "somewhat slimmer", AIB executive chairman David Hodgkinson sent a memo to staff last week saying that its restructuring plan would be unveiled in the first quarter of 2011.

This appears to be reflected in a new-found desire among AIB staff to stay put until redundancy plans are unveiled.

As we mentioned last month, AIB staff were getting itchy feet in anticipation of expected redundancy announcements at the bank. But since the EU-IMF bailout, there's been something of a resignation that it's better to wait for redundancy, suggest recruiters.

"Two months ago most of the applicants for vacant roles were coming from candidates at AIB," says one financial services headhunter. "Now, most appear to be sitting tight."

By selling its Central and East European business, AIB will effectively lift out around 9,500 staff and the sale of Goodbody Stockbrokers to Fexco Holdings also takes 270 from its headcount.

However, AIB is likely to face further pressure to divest assets under the EU-IMF rescue plan.

AUTHORPaul Clarke

We
Wearescrewed
14 March 2011
Having worked in a company that liquidated I know what it's like to be made redundant. In our case we were paid statutory redundancy only as secured debtors rated higher than employees.
The banks do not have the money to pay the large redundancy packages paid in the past neither do the government to civil servants.
Are the increases we have seen recently in mortgage rates an effort by the banks to obtain cash to pay redundancy? Seems so.
Ultimately the banks and the government are bust. The employees and civil servants should receive statutory only. It should not be up to tax payers to fund the banks generous redundancy severance deals.
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Pa
Pablo
9 February 2011
To answer your question Joan, Secretariat clearly doesn't understand that Capital Markets never lent to anyone in Ireland and it is too complicated for him. As to his suggestion to "ring the Regulator" who was in total denial a week before the bank guarantee... enough said.
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Th
The People
14 December 2010
" senior departures " We need to know if they were paid a secret bonus? Where can we find details of their severance package?
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Al
Allison
13 December 2010
Not good times and traumatic for all losing their jobs.
How horrible to send your CV to recruiters who don't respond.
Have you thought about an alternative approach - starting your own business?
It's easier now than it's ever been and with access to the internet, you have a global market at your fingertips
Good luck all
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Se
Secretariat
10 December 2010
@Brian....Staff spoke up, but were ignored ....Ring the Regulator ?
@joan, its stupid, not stipid. As u out yourself as an AIB Capital markets staff member.. "We never gave anyone"....go back and look again at what deals were done.remember how your bank use to take out them full page ads in the great days of Boom ...Telling all the world the big deals that you were doing.....Never lent to anyone in Ireland......Jesus wept, what were you at ?
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