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Bank withdraws jobs

The World Today - Friday, 14 November , 2008 12:10:00

ELEANOR HALL: The Australian banking and finance sector is haemorrhaging jobs with one of the big
four banks, the ANZ, announcing today that it will axe 1,000 employees over the next few weeks.

The Finance Sector Union says it is a "bleak day" for ANZ staff.

But analysts are warning there'll be more bad news for brokers, market analysts and middle managers
across the banking sector as the financial crisis continues to wreak havoc.

Jane Cowan has our report.

JANE COWAN: ANZ employees woke up to speculation that as many as 3,500 of them would lose their
jobs before Christmas.

That figure would represent ten per cent of the bank's workforce.

The bank's chief economist Saul Eslake knew better than to comment on ABC radio this morning when
questioned by presenter Libby Price.

SAUL ESLAKE: I've heard stories circulating within ANZ but unless I want to be one of those ten per
cent who are losing their jobs, I suspect I'd better leave that to those who are authorised to
comment on behalf of ANZ about that kind of story.

LIBBY PRICE: Fair enough. I mean after all what could they do but sack you so I thank you.

SAUL ESLAKE: Indeed.

JANE COWAN: The official spokesman for the ANZ is Paul Edwards.

PAUL EDWARDS: I would characterise this as more of a "belt-tightening" exercise.

JANE COWAN: Paul Edwards says categorically there are no plans to cut ten per cent of the
workforce.

He says it's about trimming the fat that's built up during the good times in the middle management
ranks of the bank's bureaucracy.

PAUL EDWARDS: We announced in September that we were going to have a new structure with fewer
middle management layers in it. Those plans are now starting to crystallise.

JANE COWAN: Paul Edwards says front line customer service positions will be spared but he is not
willing to say exactly how many middle managers will soon be looking for work.

The World Today understands between 500 and 1,000 heads are on the chopping block.

LEANNE SHINGLE: It is a very bleak day for the ANZ workforce.

JANE COWAN: Leanne Shingle is from the Finance Sector Union.

LEANNE SHINGLE: Whenever there is any discussion about cutting costs, it is always the workforce
that takes it in the neck and not the executive and certainly there would be some costs to be
trimmed from executive remuneration rather than the workforce.

JANE COWAN: The ANZ is far from the only bank cutting costs by axing jobs.

Many in the industry see the cuts as inevitable but the FSU's Leanne Shingle doesn't accept that.

LEANNE SHINGLE: The FSU is calling on the employers in our sector to stop taking a short term view.
To think about the long term opportunities that the current economic situation may present for the
Australian banking industry. Opportunities to actually grow our industry rather than cut jobs.

MARTIN FAHY: This news really indicates the fact that the financial services industry is often a
leading indicator of a downturn in the wider economy and that is why we are seeing these
announcements coming through at the moment.

JANE COWAN: Dr Martin Fahy is the CEO of the Financial Services Institute of Australasia which
represents professionals working in the financial services industry.

MARTIN FAHY: This is obviously worrying and very worrying for those involved and it is not a
desirable situation. However when we look out at the downturn there has been certain sectors within
the financial services industry that have been impacted. So areas such as securitisation, areas
such as syndication within the wider sort of global pipeline around investment banking, deal flow,
private equity etc.

So we have seen a downturn in activity. We also have to bear in mind that the industry has been
continually restructuring around the conversance of products and the emergence of new products.

So it is not unexpected to see some restructuring.

JANE COWAN: And the job losses won't be limited to the ranks of middle management.

Brett Le Mesurier is a banking analyst at Wilson HTM.

BRETT LE MESURIER: Well, it is just what typically happens when there is a downturn in the economy.

JANE COWAN: These job losses will come from the ranks of middle management, the ANZ says. What
about people who are working as finance brokers, stock brokers, market analysts? What is the future
like for them?

BRETT LE MESURIER: Well, we see generally in the market declining levels of activity and obviously
that is putting downward pressure on revenue. Costs are, well headcount is basically the variable
cost in that environment so as revenue falls, heads unfortunately will also fall generally in that
industry.

JANE COWAN: Is this something that you are noticing already from the inside?

BRETT LE MESURIER: There are some stories that we hear about that generally in the market place,
yes.

JANE COWAN: How pronounced is it at this stage?

BRETT LE MESURIER: Oh, it is still minor at this stage and the extent to which it gathers pace will
obviously depend on what happens to the level of the market and the volume of activity but we have
seen activity decline quite significantly in the last month or so.

JANE COWAN: So your forecast is fairly bleak?

BRETT LE MESURIER: Well bleak depends on your expectation but you are probably, by bleak you
probably mean are there going to be fewer employment opportunities in the finance industry and I
would expect that to be the case.

ELEANOR HALL: That is banking analyst Brett Le Mesurier. Jane Cowan with our report.