AIB to cut 1,500 jobs and close several Irish branches as part of cost-cutting measures
A voluntary severance programme for AIB employees will be opened in 2021.
AIB is to cut 1,500 jobs, close several branches in Ireland and merge a number of others in the next two years.
Details of cost-cutting measures were announced on Wednesday following the conclusion of a strategic review which AIB says was shaped by the acceleration towards digital banking and changing ways of working through the Covid-19 pandemic.
In order to achieve a reduction of costs of over 10% by January 2023, AIB says it expects to employ 1,500 fewer people by that time due to a combination of normal retirements, natural exits and voluntary severance.
To that end, AIB has confirmed that it is to re-open its voluntary severance programme early next year after it was paused in March 2020.
AIB will also be vacating three of its six head offices in Dublin and merging overlapping branches in Dublin, Cork and Galway.
Earlier this week, AIB exited its former headquarters at Bankcentre in Ballsbridge and will leave adjacent premises at Hume House on 31 December.
A further three of its six remaining Dublin head office locations will be vacated as leases come up for renewal over the next few years.
The bank will also merge a small number of branches in close proximity to one another in Dublin, Cork and Galway in the first half of next year due to what it describes as a “service overlap”.
In Dublin, AIB’s Westmoreland Street operations will move to its Dame Street branch, the Crumlin Cross branch will move to Crumlin Road and 52 Baggot Street will move to 1-4 Baggot Street.
In Galway, AIB Eyre Square will move to Lynch’s Castle and in Cork, AIB’s Patrick Street branch will move to 66 South Mall. AIB says it will communicate details to customers to ensure a seamless transition to the new arrangements.
The moves to close a number of its head offices and merge branches, AIB says, has come about due to the proven capability and effectiveness of remote working, a lower headcount and the need to reduce costs.
Since the outbreak of the Covid-19 pandemic earlier this year, 80% of AIB’s workforce has been working from home, while head office requirements in Dublin alone currently accounts for 50% of AIB’s total property costs.
Other measures being taken to cut costs include AIB exiting SME lending in Britain and the exploration of opportunities to enhance and diversify revenue to become a full service provider of financial services for customers, particularly in the Life, Pensions and Investment segments.
The bank says that services at branches will further evolve towards sales and advisory, with figures showing that AIB customers interact with the AIB app more than 1.54 million times per day compared with 40,000 daily branch visits.
“Our plans are now in place to ensure AIB’s long-term sustainability as a major supporter of Ireland’s economy and our 2.8 million customers,” said AIB CEO Colin Hunt.
“Our strategic plan, which will be implemented over the next three years, has been influenced by the accelerating effect of Covid-19 on customers’ preference for digital banking and emerging new trends in how and where our people work."
“As one of Europe’s best capitalised banks, the updated strategy we are announcing today will ensure that AIB remains resilient and adaptable so that we can continue to provide maximum support to our customers, our communities and the wider economy,” Hunt added.