Australia’s big four banks will slash 20,000 full-time jobs throughout the year in an effort to cut costs and make way for new technology, experts predict.
NAB got the ball rolling in September when it announced it will cut its job force by 6,000 to make way for 2,000 digital jobs, paving the way for Commonwealth Bank, ANZ and Westpac, CLSA analyst Brian Johnson told the Australian Financial Review.
‘We think the rest will follow,’ Mr Johnson said.
‘The only lever left is costs. We are in a low-growth world and the banks have given staff above-inflation pay rises of 3 per cent across the board.’
NAB’s reduction equalled 12 per cent of its entire work force.
All four big banks have a total staff of 159,028.
A 12 per cent reduction across the board would equal just under 20,000 jobs, according to the AFR.
Over the past two years, ANZ has cut 10 per cent of its employees – or 5,456 people.
While Westpac slashed just one per cent of its jobs in 2017 to leave a total of 35,096 employees, Commonwealth Bank added 100 staff to its pay roll.
In September, NAB chief executive Andrew Thorburn – who will earn $6.7 million this year – announced that technology has forced the bank to ‘re-evaluate’ its workforce.
‘As transactions move to digital channels — and this is driven by our customers — we will need fewer people,’ said Mr Thorburn, who lives in a $3.235million mansion in South Yarra
‘What we are not saying is that 6,000 are going here and here and here, it will be done over three years.’
The job cuts equal 20 per cent of NAB’s employees and will save the bank $1 billion, according to The Sydney Morning Herald.
The bank will invest $1.5 billion in increasing automation to simplify its business, which would create 2,000 new digital jobs.
With new roles created within the company, the job loss could end up being 4,000 to 2,000, Mr Thorburn said.
Current staff will be moved into new positions if possible, Mr Thorburn said.
While new bank branches will open up in growing areas like western Melbourne and Sydney, some will be forced to close.
‘We’re investing here to grow and drive productivity, so it’s a very good investment story, it’s a long term story. But there’s no doubt that our industry is going to have to significantly re-shape our workforce, and that’s what we’re facing into,’ he said.
Victoria’s Treasurer Tim Pallas said he expects a ‘disproportionate number’ of NAB job losses to hit his state.
‘At the moment you would expect that a disproportionate number … will come from Victoria because the headquarters are based here,’ Mr Pallas told reporters on Thursday.
‘This is a three-year phasing period that they’re proposing, so they should be able to manage this sensibly and I urge them to do so.’