Bank of Cyprus announces voluntary retirement scheme

The Bank of Cyprus on Monday announced that it will implement a voluntary retirement scheme that will seek to reduce its staff by 15 per cent, which amounts to approximately 500-600 employees.

According to a statement by the bank, the scheme will be the last one that it will be carrying out.

Employees that choose to accept the terms of the scheme will be offered a compensation amount of up €200,000, tax-free.

If the scheme does not achieve the desired reduction in staff, the bank said that it will consider other avenues, including redundancies.

In an internal statement sent to employees, Bank of Cyprus CEO Panicos Nicolaou said that the bank’s desired changes to its operational and business model, as well as its ongoing digital transformation, will significantly affect its structure and operations.

These actions include the sale of non-performing loan portfolios and other assets, as well as the upgrading and expansion of the bank’s digital services and products.

The latter action, which may entail self-service solutions for customers, without the need for their physical presence in the store, will reduce the number of transactions carried out in stores. This will, in turn, decrease the number of staff needed in stores.

In addition, the reduction of administrative and support tasks has already been achieved through a number of actions, including automation, system upgrades, process simplifications and centralisations, as well as the radical simplification and automation of the financing process.

Moreover, the bank said that it will also streamline its geographical footprint by closing 15 more branches.

Based on the above actions, the bank prepared a comprehensive reorganisation plan, which captures the main necessary changes of each of its divisions.

The changes will result in the abolition of many existing roles, something that will be reflected in the overall reduction in staff numbers.

“In this context, we have considered all possible staff reduction options,” Nicolaou said.

“Out of respect for our staff and in response to the request of [banking union] Etyk, and despite the competitive economic environment, the bank’s management has decided for the last time to offer, a large-scale generous voluntary exit scheme, with a maximum amount of compensation of €200,000”, he added.

The Bank of Cyprus CEO also said that “this decision was made consciously in order to give the opportunity to those who will no longer have a job or cannot meet the demands of the new era to leave with dignity”.

He noted, however, that in case the desired staff reduction is not achieved, other methods of reducing the number of staff should be considered, “including that of redundancies, based on the reorganisation plan that has already been submitted for consultation with Etyk”.

The plan has also been sent to the Department of Labour Relations of the Ministry of Labour, Welfare and Social Insurance.