Westpac will not rule out further job cuts this year in response to worsening economic conditions. The bank’s technology operations have already been hit hard, with another 126 jobs lost in the latest round of cuts announced this week.
This follows the axing of 560 positions in technology, mortgage processing and head office departments announced in February.
Westpac spokesperson, Supreet Gosal, confirmed that further jobs cuts are likely, but was unable to confirm if these would result in increased outsourcing. “We’ve got no targets but we do expect staff numbers to be lower by the end of the year across the Australian business. When we review operations we will make a decision about whether [more] jobs will go offshore,” Gosal said.
The current round of cuts will affect the bank’s Sydney CBD operations and a technology centre in the southern suburb of Kogarah. Further positions will be lost in Queensland, South Australia and Victoria. The roles are predominantly in the IT development and system maintenance areas.
The Finance Sector Union said it is bracing for further cuts to follow, as market conditions continue to force the bank’s hand. “I think it’s fair to say that there will be more job cuts this year,” said FSU spokesperson, Leanne Shingles. “If their costs are going up in terms of sourcing funding, they need to cut costs and in our experience that tends to be from their workforce.”
In February, Westpac, senior executive, Peter Hanlon attributed job cuts to weak demand for loans. RBS banking analyst, John Buonaccorsi, said demand levels are unlikely to improve in the foreseeable future, adding further pressure on banks. “We don’t see loan demand picking up. We’re looking towards the next year or two,” he said.
David Ellis, Head of Banking Research at Morningstar is also not convinced conditions will improve for the Big Four banks this year. “Credit growth is weak,” he said. “We have at it at moderate levels for the medium term: up to two years. [An improvement] depends on the non-resource sector picking up, particularly in NSW and Victoria. We think these are soft.”
Westpac Chief Operating Officer, John Arthur, said the cuts reflect ongoing changes in the retail banking environment.
“The financial services industry is undergoing a significant structural change as banks strive to become stronger by being more efficient and competitive in serving customers needs,” he said. “Restructuring decisions are always difficult and are only made after a thorough review.”