Despite record profits, ANZ begins slashing jobs

Fury has erupted as ANZ confirmed that the process of axing staff had begun in Melbourne, despite the bank posting record profits of $5.36 billion in 2011.

Last week, it was announced that banks are set to slash jobs in an attempt to uphold their record profit margins. ANZ are among the first to swing the axe.

The bank confirmed that it had told a number of retail and commercial staff that they would no longer be needed. ANZ employees in Melbourne were told to reapply for their jobs as the cuts began in earnest. At least 130 jobs are to go, and workers will only discover their fate in six weeks when the job applications have been reviewed.

The bank is facing pressure from its top echelons to cut costs as margins begin to tighten. The Finance Sector Union expressed its fury at the stunt, accusing the bank of acting on impulse to keep fat-cat shareholders happy.

"The banks feel they are under pressure to produce record profits year after year and as soon as they are under a little bit of pressure their answer is to cut thousands of Australian jobs," said FSU National Secretary Leon Carter.

ANZ’s profits increased by 19% to $5.36 billion in 2011 as all of the ‘Big Four’ banks posted record results. CEO Michael Smith earned roughly $5 million from the bank’s record performance, and has been heavily incentivised by new arrangements that will see him gifted a $3 million bonus in stock if he meets targets on share price growth, dividends and distributions.

There will undoubtedly be a level of uproar at ANZ’s top hierarchy, which appears focussed on rewarding itself while ordinary workers are dismissed. ANZ's directors, who recommended the remuneration proposal to shareholders, have unabashedly said that the additional incentive will ''motivate'' their chief executive and more closely link his interests with those of shareholders.

An ANZ spokesman said: "These changes reflect continued belt-tightening in the business, given the more subdued economic environment and the continued pressure funding costs are placing on margins".

It is estimated that ANZ relies on Western debt markets for about 40% of its wholesale funding.

This does not excuse their move, though, according to Mr. Carter, who believes that their profitability obliges the bank to keep everybody employed. When “anything gets tough in finance the only trick in their locker is to put jobs on the line”, he stated.

Do you work for ANZ, or another large Australian bank? Are you concerned about your job security? If you are a bank account holder at ANZ, will you view it differently in light of this news? Let us know here at Which4U!

Ashley King