Allied Irish Banks (AIB) has confirmed it is looking to make 2,500 staff redundant as part of plans to reduce staffing costs by £142 million (€170 million) over the next year.
The announcement – 25 per cent higher than originally predicted by City analysts – confirmed that it hopes to confirm details of the planned redundancies during early April.
Reports in the Irish national press suggested that staff may be offered two weeks’ statutory redundancy plus an additional three weeks’ pay for each year of service, capped at £104,000 (€125,000).
David Duffy, chief executive officer at AIB, said the group is hopeful the reduction in staff numbers can be achieved on a voluntary basis and that there would be as much consultation with staff as is needed.
He added: “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.
“I am confident that AIB will achieve sustainable profitability with a reduced cost base essential to delivering this recovery.”
Duffy confirmed that the AIB has met with the union executive today to discuss the process and said that the redundancy process would incorporate provisions for “actuarially reduced early retirement” in addition to voluntary redundancy.
He added that the terms being discussed for redundancy are consistent with government parameters.