ANZ Bank boss says 3500 job cuts are last resort but needed

ANZ Bank chief executive Nuno Matos says slashing 3500 jobs and a further 1000 contractors is a last-resort move needed to simplify the bank’s operations and help it remain competitive, as the finance union slammed the sackings as a reckless profit grab.

Four months after starting as ANZ’s boss, Matos announced on Tuesday a plan to cut global staff numbers by 8 per cent, a move expected to mainly affect the bank’s Australian workforce of more than 21,000.

Matos said the cuts were aimed at reducing complexity and removing duplication in the bank as the industry experiences a period of digital change. He denied they were linked to the rise of artificial intelligence.

“Those decisions are very tough to take. You don’t want to take them, because they’re going to impact people, our people, their families, and it should be the last resort,” he said at The Australian Financial Review Asia Summit.

“This is about, if you want, simplifying the company. This is about getting the basic things right in our company.”

ANZ, which is headquartered in Melbourne, said the cuts would occur between now and next September. Matos also said the reductions aimed to stop projects and initiatives that were unaligned with the bank’s priorities.

The cuts are expected to affect back-office staff, rather than customer-facing workers, with Matos saying the bank would not cut jobs in branches, call centres or, “for the most part”, its complaints handling team.

While the union has alleged that ANZ is moving too quickly in its restructure, Matos said the bank needed to embrace change. He pointed to a “rapidly evolving and highly competitive” banking environment and highlighted the rise in digital banking, while saying the move to cut 3500 jobs had been carefully evaluated.

“I hate to do this, but … it’s for the future of the company,” Matos said.

The lender is taking a $560 million pre-tax charge in its first-half results to pay for the redundancies.

The Finance Sector Union, which has been in urgent talks with ANZ over Matos’ restructuring plan in recent weeks, slammed the cuts as “unhinged” and driven by “pure greed”. ANZ made $3.6 billion in profit during its latest six-month period.

“ANZ is betraying 3500 workers in one of the world’s most profitable banking sectors, cutting jobs simply to chase even bigger profits. This is out of control – it’s not strategy, it’s unhinged,“ Finance Sector Union president Wendy Streets said.

“When the FSU asked ANZ who will actually do the work of the 3500 sacked staff, the bank had no answer, except to say the work will simply stop. That’s not a plan, that’s chaos.”

Matos denied the move was about lifting returns – though analysts from Citi said the announcement signalled the bank’s plan for productivity and efficiency.

Matos said: “This is not about profits. This is about getting the things right, the basic things that the bank needs to do, right.”

The union said it would challenge the bank at the Fair Work Commission.

The announcement was an unavoidable topic of conversation as workers at the Docklands Melbourne headquarters filed out for their lunches and morning coffee orders on Tuesday.

One employee said his team was briefed about coming redundancies a few weeks ago, and that he was told his team in the institutional banking sector would not be heavily affected.

Other employees said they found out about the cuts in a staff email on Tuesday morning, and had not yet been told exactly how their teams would be impacted.

While several said it was unsettling for morale, another long-term employee said he wasn’t too concerned as his team absorbed several redundancies in the restructure 18 months ago.

“It’s just business as usual. Until we know, you can’t worry about it,” he said, commenting on the morale in the team he worked for.

The cuts come two weeks after ANZ made an embarrassing email error in its restructuring efforts, accidentally informing some staff members who were to be made redundant about the process for returning their laptops before they had been told they were losing their jobs.

ANZ’s announcement on Tuesday did not provide details of which parts of the bank the job cuts would come from, but Citi analyst Thomas Strong said he thought the bank’s retail banking division and its technology functions were likely to be affected.

Analysts, including Strong, have predicted ANZ will announce changes to its digital platform, ANZ Plus, which is costly and has been regarded as underwhelming by financial markets.

Matos is set to update the market on ANZ’s strategy at a briefing on October 13, and analysts have also predicted he could announce new financial return targets for the bank.

“ANZ has well signalled a strategic shift under Nuno Matos, which would be detailed at a strategy day in October,” Strong said.

“In that sense, it is unsurprising that the ‘bad news’ in the upfront cost has been delivered ... before management can focus on better medium-term returns in October.”

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