Thousands more jobs doomed

Ben Schneiders and Eric Johnston

February 14, 2012

Comments 9

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ANZ won't rule out more job cuts

Despite slashing 1000 jobs and raising mortgage rates to protect profit margins, ANZ Australia CEO Philip Chronican says there could be more pain.

MORE big employers, including Qantas, are poised to shed workers across Australia, adding to the recent wave of cuts in banking and in the struggling manufacturing and retail sectors.

As the ANZ bank yesterday flagged plans to slash 1000 positions - mainly at its Melbourne headquarters - it emerged that Qantas was set to reveal job cuts on Thursday when it releases its half-year earnings.

Hundreds more jobs are at risk in retail after administrators were appointed yesterday to the national bedding and furniture chain Sleep City.

Illustration: Ron Tandberg.

The latest job losses come after moves by car makers Toyota and Holden to slash their Australian workforces, and as Alcoa considers offloading hundreds of workers at its unprofitable aluminium smelter in Geelong.

The Baillieu government has also signalled plans to cut 3600 public sector jobs in Victoria.

Analysts have warned that thousands more jobs in the banking and finance sector are at risk following ANZ's move to cut its workforce by about 1000.

ANZ said most of the jobs to go would be in middle management, back office and support roles in Melbourne, including many at the bank's head office in Docklands.

ANZ Australian head Phil Chronican told The Age the cuts were in response to structural change sweeping the banking sector. These included the rising cost of funding loans, a sharp drop in demand for loans as well as increasing global regulation, which was driving up expenses.

''This is the environment we need to get ready for and it's likely to persist for a number of years,'' Mr Chronican said.

Finance Sector Union national secretary Leon Carter said the cuts were unjustified after the bank made a $5.3 billion profit last financial year.

He also warned that as many as 10,000 finance sector jobs could go in the next 18 months.

''This decision is nothing more than a short-term money-grubbing exercise designed to keep their institutional investors happy at the expense of their customers, the community and their workers,'' Mr Carter said.

He would not rule out industrial action in response to the job cuts, which will result in some work being sent to India and the Philippines.

A spokesman for Workplace Relations Minister Bill Shorten also criticised the bank. ''Banks should be in no doubt that the government believes they are misguided if they think cutting or off-shoring Australian jobs is the panacea for their problems,'' the spokesman said.

Premier Ted Baillieu said the job cuts at ANZ were ''extremely disappointing'' and said uncertainty on financial markets and the weaker global economy were ''placing considerable pressure on the national economy''.

The ANZ cuts come just weeks after Westpac said up to 560 jobs would go.

Despite earning about $24.3 billion in profit last year, the big four banks are looking at cost cuts as a means to maintain those profit levels.

Demand remains soft for banking services in much of the economy as consumers and businesses try to pay back loans rather than take on fresh debt.

Analysts, including brokerage UBS, have forecast the big banks will scrap as many as 7000 jobs over the next two years.

Amid speculation about more job cuts at Qantas, Mr Shorten warned the airline's managers to focus on the longer term and said that ''if you cut too much you then lose skills that are never coming back''.

A Qantas spokesman said it would not release any details ahead of its results but denied it would send jobs offshore.

The latest job losses come as Bureau of Statistics job figures to be released on Thursday are expected to show a slight rise in unemployment to 5.3 per cent.

Jobs growth has stalled and 2011 was the weakest year for the job market since the early 1990s recession.

Australian Workers Union officials met Prime Minister Julia Gillard and Industry Minister Greg Combet yesterday. AWU national secretary Paul Howes said there was a role for government intervention to help industry due to the very high dollar.

The Finance Sector Union's Mr Carter said government assistance to the banking industry should be conditional on no jobs being sent overseas.

Meanwhile, Crown casino is expected to cut some jobs after managers were briefed yesterday about a management revamp. About 20 to 30 redundancies are likely.

With BEN BUTLER

9 comments

Just as well the unions got rid of those nasty work choices of the Howard Govt. The only solace in all of this is that by the main, its union jobs being lost.
Why would any employer in Australia want to be involved in an industry dominated by unions under this Govt?

Commenter

Mike

Location

Vic

Date and time

February 14, 2012, 8:13AM
This is the beginning of a wave of loss of jobs, worse than the 1990's - and the 2008 GFC.
consequence where employers could not hold on to labour since.
Colorado hits the wall, Banks loses 10,000+ in next 2 years as ANZ chief tersely if not unruefully remarked, service sector depleting.
People are not spending either. Tighter bank regulation opposed to private business to make a dollar; where do you cross the line.

Commenter

Karen H

Location

Date and time

February 14, 2012, 8:22AM
"no other reasons besides greed is behind the move by ANZ, surely he has forgotten whose money were used to bail the bank out when they were in serious trouble; it's about time customers of the bank vote with their feet, please"

Commenter

BigAl

Location

melbourne

Date and time

February 14, 2012, 8:23AM
Are the jobs being "lost" or being transferred overseas? How about a bit of leadership from companies and shareholders?

Commenter

Trevor

Location

Gold Coast

Date and time

February 14, 2012, 8:28AM
This is the result of 'productivity improvements' that industry has been trying to cope with since the 80's. The reality is that it just means 'more work for less money'. Funnily enough, at the other end of the scale it means 'more money for less work(ers)'.
What irks me most is that the excuse that my superannuation is tied up in these entities, but they still keep coming back to me and saying 'sorry, but your super is going backwards - but we made a massive profit'.

Commenter

99%

Location

Melbourne

Date and time

February 14, 2012, 8:28AM
So Mr Ballieu is "disappointed" at the ANZ announcement to cut jobs. As a public sector employee, I am disappointed that Mr Ballieu is cutting Victorian State Government positions. In the current economy, those employees will have trouble finding new jobs and it will probably end up costing the government (state and federal) more in lost taxes, welfare payments and other concessions than keeping those 3600 staff on. It's annoying to hear Ballieu commenting on job losses when he is cutting jobs and adding to the un- and under-employed.

Commenter

Butch

Location

Date and time

February 14, 2012, 8:28AM
Come on Teddy - lets see your promise of job growth now???

Commenter

Kipper

Location

Date and time

February 14, 2012, 8:31AM
We are heading towards 7-8% unemployment levels. Even the mining jobs have peaked and will reduce next few years.

Commenter

Jobs

Location

Date and time

February 14, 2012, 8:32AM
ANZ CEO said on Friday that raising interest rates was "in the interest of a stable economy". Now he says that slashing 1000 jobs, which is definately not in the interest of stability, is to "protect profit margins". I would suggest that the only thing the CEO has in mind, is his bonus, which is most likely based on share price.
It is unfathomable to think that 1000 roles that were useful in keeping the ANZ profitable, are simply not required to do the same within 24 hours.
Another point - the touted but not implemented "super profits tax" may have circumvented this action. In place, i believe that getting rid of jobs would've had greater effect on profit than a tax on the increased profit caused by the loss of jobs. The bank would've wanted to keep their profit margins below a threshold to avoid the tax, and keeping staff is one way of doing that.
Then again... "protecting profit margins" is total hogwash when ur profit is 6 billion.

Commenter

YeahNah

Location

Date and time

February 14, 2012, 8:34AM