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Cibc Eyes Lay-Offs For 10% Staff Cost Cutting

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

CIBC FirstCaribbean International Bank (Bahamas) last night warned lay-offs were imminent as the bank moves to cut regional staffing costs by 10 per cent, with at least 12 employees having already accepted voluntary separation packages to-date.

Marie Rodland-Allen, the BISX-listed institution’s managing director for the Bahamas and Turks & Caicos, said it was set to make “decisions on redundant positions”, although she declined to say how many posts might go.

She was speaking after CIBC FirstCaribbean’s regional chief executive, Rik Parkhill, confirmed earlier this week that the bank - which has a 3,500-strong workforce in the Caribbean - was looking to cut employee costs by 10 per cent.

Whether that means around 350 employees will be let go is uncertain, and CIBC FirstCaribbean has give no territorial breakdown of how any forced redundancies will play out.

However, the situation means a nervous time for CIBC FirstCaribbean’s Bahamian workforce. The bank had 747 employees as at end-October 2012, and the 10 per cent employee cost reduction seemingly implies that up to 74-75 might ultimately be let go.

The Bahamian operation is thought to account for around 40 per cent of CIBC FirstCaribbean’s total business, and its 2013 annual report shows the Bahamas generated 49 per cent - almost half - its $176 million retail and business banking revenues.

The Bahamas also produced 21 per cent - one-fifth - of the bank’s $214 million wholesale revenues for the year, and accounted for 32 per cent - almost one-third - of its $50 million wealth management revenues.

The restructuring is part of the bank’s turnaround plan, following the $27.5 million net loss for the fiscal year ended October 31, 2013. It is booking a one-off $37.6 million restructuring charge as a result, with some $25.695 million related to severance pay.

Mrs Rodland-Allen, in a e-mailed response to Tribune Business questions, said: “The recently announced restructuring exercise was aimed at addressing the negative impact of the global recession on our profitability, which resulted in increased loan losses and fewer revenue-generating opportunities, and an increase in our operating costs.

“The restructuring exercise is designed to achieve a reduction of employee costs of 10 per cent. We started the exercise with 3,500 regional employees, and the first step was the non-renewal of contracts of those workers who were on contract with the bank, and where projects came to their natural end.

“In addition, we offered a voluntary early retirement programme for eligible employees, and a voluntary separation programme for those employees who may wish to leave, but are not eligible for early retirement. The voluntary programmes have received a reasonable response and we are currently engaged in a robust, organisational redesign, manpower and transition planning exercise to ensure our ability to deliver continually improving customer service.”

  Mrs Rodland-Allen then added: “We will now also move to decisions on redundant positions that have come about due to consolidation, automation, process reengineering and improvement.

“There are essential steps in this process which involve regulatory, union and other relevant stakeholder consultation, which we must observe. In keeping with our practice, we will abide by the established protocols and refrain from public statements during that process.”

Meanwhile, Theresa Mortimer, the Bahamas Financial Services Union’s (BFSU) head, told Tribune Business that at least a dozen “rank and file” employees at FirstCaribbean International Bank (Bahamas) have accepted voluntary separation packages to-date.

“People are going. We’re still working on the process for persons who want to go. So far it’s been going good,” Ms Mortimer said.

“When the bank would have spoken to the union in September, they didn’t give a number; they just said 10 per cent. That was supposed to be across the Caribbean. That’s the 17 territories, and we haven’t had a meeting as partners since that time.

“We will wait patiently to see what the next step is going to be. We just have to wait and see. A lot of people are going peacefully. I have had about a dozen persons from the rank and file who have left so far. No one is calling yet with any problems, so I consider that a good thing.”

Ms Mortimer added: “In the case of the managers they have a union in place. I haven’t to spoken to the managers union president in a while. I can’t say what their numbers are like, but I know for me, my people are going peacefully. I haven’t had any complaints yet.”

Ms Mortimer said the BFSU was scheduled to have a meeting with bank executives next month. “Hopefully that meeting will come off and we will know more at that time,” she added. 

CIBC First Caribbean last year announced plans to restructure its operations in the Bahamas and the region, Mr Parkhill stating at the time in a letter to staff that in order to deal with challenges stemming from the recession, CIBC FirstCaribbean had undertaken an 18-24 month initiative to improve its overall efficiency

“The bank has offered voluntary early retirement to eligible employees, and voluntary separation to employees who are not eligible for early retirement but wish to leave,” he said.

Comments

banker 5 years, 8 months ago

First Scotiabank sends jobs to Jamaica and now CIBC cutting 350 people. And Pinder says that he is working to protect Financial Services? He is presiding over the demise of it.

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