Bank of Ireland Rationalisation

boa-constrictor

Bank of Ireland today announced that they are going to cut 2,100 jobs in a hugely profitable organisation where staff are already so overworked and under so much pressure to perform that there are at this moment numerous members of staff on sick leave all over the country. 60% (1,260) of the staff cuts have to happen within 12 months and to make it as stressful (and inefficient) a process as possible, instead of offering a voluntary redundancy package so that the people who want to leave can go, they have decided to select the people to be laid off without consultation with staff or the union. This in effect means that many people who would be quite happy to leave for personal reasons will keep their jobs and many others who (despite all the downsides) want to stay will be booted out on the street.

If Intel or another large employer made this announcement today there would be an explosion of objection from Leinster House. The banks have it sewn up though - preferential tax treatment and no regard for anyone other than the fat cats at the top.

RuggieBear

very strange way to do bussiness.....funny they are making cuts when another competitor deems it a good time to enter the market....i'll never understand irish banks...

Merrion

This includes staff that are being transfered to other companies - i.e. IT outsourcing...

boa-constrictor

No - I.T. hasnt been mentioned as being in the line of fire yet. It refers to call centres and credit staff. Outsourcing is just a more acceptable way of saying axed, and remember if the 'oursource' call centre jobs, they are likely to be outsourced to companies who operate in other countries. Ever noticed how these days when you ring a company supposedly based in Dublin, you end up talking to someone based in England or Scotland. Many companies in the US now employ call centres in as far away as Japan. It will hardly be much comfort to Ireland if 2,000 jobs are axed but the upside is 2,000 extra jobs in Tokyo.

isolde

Interestingly, Deutsche Bank just made a similar move in Germany. It's all about corporate ethics if you ask me... and the question is, does it boil down to corporate greed?

Bank of Ireland recorded profits of over €1.3 billion. These job cuts will result in savings of around €120 million, over a 4-year period. They don't have to cut their staff levels, they're merely doing it to make more money. Is the company's only obligation to it's shareholders? What about the rest of its stakeholders.. what about the employees, the human capital?

In the case of Deutsche Bank, they plan to cut 6,400 jobs, despite pre-tax profits last year of over €4 billion, an increase of 50% on the previous year! This too, is to save money...

~ isolde.

boa-constrictor

isolde wrote:

Interestingly, Deutsche Bank just made a similar move in Germany. It's all about corporate ethics if you ask me... and the question is, does it boil down to corporate greed?

This may sound like I'm being sarcastic but I'm not. There is no such thing as corporate ethics. The vast majority of publicly quoted companies will walk over anything and anyone who stands in between them and a profit. The reason a bank (thinks it) has to keep its cost to income ratio low is that if a larger bank (say Barclays) sees that BOI has a slightly high cost to income ratio, the will surmise that they can take over the bank, improve the ratio by making the cuts and make a huge short term profit from the resultant surge in the stock price/increase in profitability. The guys on the top floor in BOI have decided to that they want to keep the Bank in its current ownership and they think that this is a noble thing to do. What I would say is, let Barclays (or whoever) takeover BOI - the shareholders will get well paid for their shares, the customers will have real competition not the cosy cartel they have now and the staff wont be treated any worse by Barclays than they are being treated by BOI now.

What BOI are doing, reminds me of the joke about the 3 men who get shipwrecked and subsequently captured by natives on a remote island. The first two are killed and their skin used to make canoe's, so the third one picks up a spear and stabs himself in the chest repeately saying "those b**tards aren't going to make no f**king canoe out of me".

If you had a profitable business, would you invest more in it, or downsize it. BOI are destroying a very profitable organisation, just to keep it Irish run.

dahamsta

isolde wrote:

Is the company's only obligation to it's shareholders?

Legally speaking, yes, as right-wingers take great pleasure in telling people. They'll also probably tell you to vote with your feet, and since I've been meaning to do that for ages, that's precisely what I'm going to do, together with an accompanying letter explaining exactly why I'm doing so. The tricky part is deciding where to go...

So, any recommendations folks? Which is the best bank for business, when ethics are factored in? (Least-worst would probably be more appropriate.) What about for personal accounts?

adam

boa-constrictor

Dahamsta

Thanks for the support but to be honest I believe that there is a good chance that the bank you move to will equally disgust you in a very short period of time. It goes back to what I said above about banks not having any ethics. Its good to know that someone thinks this is wrong though. Unfortunately I cannot now move as all the other banks will be inundated with job applications within 48 hours.

I'm gutted at the way we're being treated. I have worked very hard (including doing unpaid overtime) for years in BOI and this is the thanks you I get. No matter what way this goes, I think that the staff aren't going to forget this and ultimately it will show in the bottom line. I think this will damage the BOI brand with customers and staff for the next quarter century.

BuffyBot

While BOI is making a huge cut, lets not forget how many people work for the bank in total. Now, I'm not saying what they are doing is right or wrong, but some of boa's statements needa bit of examining.

What I would say is, let Barclays (or whoever) takeover BOI

All very well in theory, but a bigger bank could come in and rationalise the hell out of BOI due to staff overlap. Lots of people would out of work then, so that's hardly a good result. All that remains in Dublin is a "shell" while most of the thinking is done at Big Bank PLC headquarters.

the shareholders will get well paid for their shares

I'm sure they would.

the customers will have real competition not the cosy cartel they have now

I wouldn't depend on that. Should Barclays (for example) take BOI over, I can't see them tinkering with the formula. BOI's a profitiable entity as it is, as part of the "cartel", much as Barclays is in the UK. Barclays aren't too worried about the "value" segment of the market, much like BOI. In terms of customer demographics, the two are very similar. A takeover isn't nessecarily the panacea you're making it out to be.

the staff wont be treated any worse by Barclays than they are being treated by BOI now.

Again, I wouldn't bet on that. The UK banks are now getting notorious for applying high pressure on thier staff to sell, sell, sell products. Lots of long term staff leave and there is a high turnover of new recruits. If you think it's bad in BOI as it is, a new owner can make it worse - a lot worse.

jumbo

boa-constrictor wrote:

Dahamsta

Thanks for the support but to be honest I believe that there is a good chance that the bank you move to will equally disgust you in a very short period of time. ...

... No matter what way this goes, I think that the staff aren't going to forget this and ultimately it will show in the bottom line. I think this will damage the BOI brand with customers and staff for the next quarter century.

Sorry to chime in. I'm disgusted by the whole thing. I've been with BOI for a number of years and I've always sung its praises to people. I liked the way whenever I dealt with them I could get a *person*. I could get (maybe I'm being a bit naive here) sound financial advice and at my local branch I've always found they've gone above the call of duty on a number of times.

If they're going to be automating everything then what way is that going to go? I may as well shop around and find the lowest bidder. I here HBOS are quite reasonable, they're setting up a retail chain soon I think. Ulster Bank have a good rep wrt being nice to deal with.

Just my 2 euro-cent,
Rob

boa-constrictor

BuffyBot wrote:

All very well in theory, but a bigger bank could come in and rationalise the hell out of BOI due to staff overlap.

If you dont think that 2,100 job cuts is "rationalising the hell" out of the bank, what would be? Instead of running a profitable bank into the ground, they could subsume it into the Barclay Group, and actually run it like a business.

BuffyBot wrote:

A takeover isn't nessecarily the panacea you're making it out to be.

I didn't hold it up as being a good thing, I said that it wouldn't make things any worse.

BuffyBot wrote:

Barclays aren't too worried about the "value" segment of the market, much like BOI. In terms of customer demographics, the two are very similar.

If you think that Barclays would do the same merry dance with AIB that BOI do (similar pricing and policies, so there is no real alternative for the customer) your way off. Barclays would represent real competition and as Michael O'Leary would "the dogs in the street know that competition is good for the customer".

BuffyBot wrote:

I wouldn't bet on that. The UK banks are now getting notorious for applying high pressure on thier staff to sell, sell, sell products.

Wrong, the banks in the UK already did that years ago. They were taken to the cleaners by the watchdog for mis-selling and have had some strict controls placed on them ever since. I could tell you stories about selling pressure that would make your skin curl, and there are effectively no controls on it here.

BuffyBot wrote:

If you think it's bad in BOI as it is, a new owner can make it worse - a lot worse.

I assume that if you know how bad it is in BOI, you must work there, and therefore you know as much as me, and if this is true, I retract all the above.

BuffyBot

If you dont think that 2,100 job cuts is "rationalising the hell" out of the bank, what would be? Instead of running a profitable bank into the ground, they could subsume it into the Barclay Group, and actually run it like a business.

I think a lot more jobs would be at stake if the bank was taken over. I'm not sure how you feel they aren't running it like a business though. They'd be slammed as bloated if they don't rationalise, and they're crucified if they do. Unfortunately job cuts like this are the way they see to making substantials savings on their cost base.

If you think that Barclays would do the same merry dance with AIB that BOI do (similar pricing and policies, so there is no real alternative for the customer) your way off.

I'm afraid we'd have to agree to disagree here. Barclay's, IMHO, sure as hell aren't going to make waves - they certainly don't in the UK. They're quite happy being one of the big boys, and quite happy keeping similar charges and policies as many of their rivals.

Wrong, the banks in the UK already did that years ago. They were taken to the cleaners by the watchdog for mis-selling and have had some strict controls placed on them ever since. I could tell you stories about selling pressure that would make your skin curl, and there are effectively no controls on it here.

They're still under immense pressure to cross-sell and mine the customer for all they're worth. There may be controls on how they do it in comparison to a few years ago, but be sure they still do it, but play nicer about it.

I assume that if you know how bad it is in BOI, you must work there, and therefore you know as much as me, and if this is true, I retract all the above.

I don't work in BOI, but I have worked in the banking industry so do have an idea of what goes on.

Blackjack

Every Bank has been shedding at some stage over the past few years. AIB did a few years ago, Barclays in the UK did as well.
It's never nice when it happens, but unfortunately it does. There's nothing anyone can say to make people feel better about it.
It does come down to the bottom line of cost versus profit. BOI also recently sold Chase De Vere in the UK (at a loss, if I recall correctly) so this has been on the horizon. They have to try to maintain a sustained period of growth, and clearly this is the way they see how.

Boa-Constrictor, I feel for you, I really do. Only last week were a couple of guys where I work made redundant, because a beancounter elsewhere decided it would save a couple of quid. Between them they'd been there about 35 years. They're still about and it's absolutely devestated all of us who work there, but as they both said, when you work for a large company, that's the threat that always hangs over you. One of them pointed out that it's the same axe that'll miss my head this time round (I work in a different area to them, and the same threat would apply except they need all they have in ours as they've replaced none of the huge number who've left over the past 2 years), but the axe will be there as long as day turns into night.

To be honest though, if you need an example of the value of keeping it Irish, take a look at the New Zealand Banking industry. All foreign owned, and fleecing the punter.

boa-constrictor

Blackjack wrote:

Every Bank has been shedding at some stage over the past few years. AIB did a few years ago, Barclays in the UK did as well.

I know. BOI did previously also. But they did it by way of voluntary redundancies. This is the first time ever in Ireland that a Bank has shed staff against their own will. There is a large amount of misinformation going on. Ever paper I picked up this week quoted Brian Goggin as saying he wouldn't rule out involuntary redundancies but the staff were told it was going to be all involuntary redundancies. When we heard the were going to rationalise we assumed they would issue details of the parting package and if you wanted to leave (as many do) you'd just put your hand up (as happened before). What we were told is that the bank was going to decide who gets the axe and impacted staff would be informed first.

Something that has the effect on morale that this is having cant be good for the company. All staff want is for them to make a small effort to be humane about it - they're frightening the sh*t out of everyone for no good reason.