04.07.2022
The Bank of Cyprus on Monday announced that it will implement a voluntary retirement program that will aim to reduce its workforce by 15%, which is approximately 500-600 employees.
According to the bank, this scheme will be the last it will implement.
Employees who choose to accept the terms of the scheme will be offered tax-free compensation of up to €200,000.
If the scheme does not result in the desired staff cuts, the bank said it would consider other options, including layoffs.
In an internal statement to employees, Bank of Cyprus CEO Panikos Nikolaou said that the bank’s desired changes to its operating and business model , as well as the ongoing digital transformation, will significantly impact its structure and operations. These actions include the sale of non-performing loan portfolios and other assets, as well as the modernization and expansion of the bank’s digital services and products.
The latter action, which may entail self-service solutions for shoppers without the need for them to be physically present in the store, will reduce the number of transactions carried out in stores. This, in turn, will reduce the number of staff needed in stores.
In addition, the reduction in administrative and support tasks has already been achieved through a number of actions, including automation, system modernization, process simplification and centralization, and radical simplification and automation of the financing process.
In addition, the bank said it will also simplify its geographic footprint by closing 15 more branches.
Based on the above actions, the bank prepared a comprehensive reorganization plan, which recorded the main necessary changes for each of its divisions.
The changes will result in the abolition of many existing roles, which will result in an overall reduction in headcount.
“In this context, we have considered all possible options for downsizing,” Nicolau said. “Out of respect for our employees and in response to the request of [banking union] Etyk, and despite the competitive economic environment, the management of the bank decided for the last time to offer a large-scale generous voluntary exit scheme with a maximum compensation amount of 200,000 euros,” he added. .
The CEO of the Bank of Cyprus also said that “this decision was made consciously to enable those who will no longer have a job or will not be able to meet the requirements of the new era to leave with dignity.”
However, he noted that in case the desired reduction in staff is not achieved, other methods of reducing the number of staff should be considered, “including layoffs based on the reorganization plan that has already been submitted for consultation with Etyk.”
The plan has also been sent to the Labor Relations Department of the Ministry of Labour, Social Protection and Social Insurance.
