According to the AFR (19/1/12), Westpac insiders estimated that the bank would shed about 600 staff this year. The speculation came after Westpac cut 28 senior technology execs last Wednesday, several weeks after Chief Executive Gail Kelly pledged a:
razor sharp focus on productivity.
Westpac cut 767 of its roles in 2011 and, like some Australian law firms, is reported to be in the midst of a significant increase in its use of offshore service providers. It is also reported to be increasing its use of external service providers within Australia. Nevertheless, there is rumoured to still be enough excess baggage within the bank to warrant the sacking of a further 600 staffers.
Westpac’s media spokesperson Paul Marriage conceded to the AFR that there would probably be fewer than the bank’s current workforce of approximately 37,700 at the end of the year:
We’re looking for efficiencies around duplication in head office and reviewing areas where we can increase our skills through using outsource providers.
Send the Firm Spy your news and views!
Loading...
If a bank makes $5b profit, can’t they do the right thing by the community and retain the staff? Sure, next year they’ll only make $4.5b profit, but they’ll keep a few hundred families with an income, and still the shareholder returns will be very good.
While I do empathise with those losing their jobs, saying things like “they’ll only make $4.5b profit” is just ridiculous. If they report say a 10% lower profit WBC’s market cap $60b is also likely to go down about 10% (at least) and that would mean $6b wiped of for shareholders….to protect a few hundred people…so no, shareholders do not get “very good” returns.
Typical of the corporate greed rampant out there. In the real world people are struggling to put food on the table and young families have both parents working full time just to make ends meet.
Are we forgetting about reality here? I hope that one of those arrogant wankstains in westpac management that made this decision are not related to the three poor souls that lost their lives in the truck crash out at Menangle. As if they were, they would realise there is more to life then ridiculous shareholder returns and corporate domination.
Look beyond your boardroom and go visit the real world you useless human beings.
Shame on you Westpac. Bloody disgraceful.
Since when are shareholders in the business of charity or owing anyone a living? People who have worked hard all their lives rely on shares to pay for their retirement. The Westpac employees will have to cop it just like everyone else.
As for the “real world” comments: just try to impart socialist principles into business and see how quick reality hits you (e.g. see Cuba or Venezuela).
A lot of people care about shareholder returns… i.e. the shareholders. Oh and many of those are your typical mum and dad investors who live in the “real world” as you put it. I am not saying tht job cuts are the right thing to do as I would need to know more about what other options have been considered, but you need to realise that corporations are not charities and that there is always another way of looking at a things.
To those that make the shareholder argument justification, you clearly don’t understand how big business or the share market works.
1. The majority of share price values are driven by irrational expectations not the fundamental values behind the share,
2. Unless profits continue to grow over time, then the share price will fall, i.e. keeping profit levels at the same level is viewed as a failure by the market, and the share price will drop,
3. What about stakeholders other than shareholders and employees like customers? Cutting costs while keeping revenue the same, implies that all job losses are equivalent to getting rid of ‘deadwood’, in actuality it means greater pressure on remaining staff reducing the value proposition to customers through lower service levels.
4. Do you think the majority of cost savings from job cuts will end up producing greater dividends or permanent share price values increases? Or will executives benefit the most through increased bonuses and performance options?
Do shareholders and executives only have a responsibility to ensure that their own personal wealth is maximized at other stakeholders expense? Somewhere Ayn Rand is laughing manically in her grave.
Executives do not give a toss about mum and dad investors, they only listen to institutional investors and major block holders because they have to. They make moves not to benefit you; they do so to benefit themselves in the short term.
And if you’re wondering I am a former banking manager, who saw the writing on the wall and left.
Tell me the difference between the bank’s offshoring and you going online and buying your goods cheaper offshore ? You are after a cheaper way to buy things and and save money. This affects retail and manufacturign jobs in Australia just as much as the bank’s offshoring.
It may sound exceptionally morbid, but this is just the tip of the iceberg.