Some 200 Bank of Cyprus employees have pushed the ‘exit’ button taking the ‘generous’ offer for early retirement with compensation, as the bank seeks to offload 500 staff before resorting to redundancies.
The Bank of Cyprus said this is its final early retirement scheme, while if the desired number of employees leaving is not reached, then management will resort to redundancies.
The bank’s early retirement scheme expires at the end of the week.
It plans to lay off 500 employees, or 15% of its staff, to downsize its network by closing 15 more branches as it speeds up its digital presence and reduces operational costs.
Panicos Nicolaou, BoC’s CEO, said that the bank would not resort to redundancies without compensation.
But the bank’s management noted this scheme would be the last on offer, with the bank resorting to other methods for staff cuts in the future.
It is the first time BoC has said it would resort to redundancies, just months after rivals Hellenic Bank’s attempt to make 350 employees redundant without compensation disrupted industrial relations.
BoC management heralded the scheme as generous, providing a maximum tax-free compensation of €200,000, which should not exceed 70% of the remaining salaries.
Reports say BoC’s management will review the scheme’s course on Monday.
Meanwhile, EU supervisory authorities have required systemic domestic banks to proceed with the preparation of business plans in which they foresee specific measures to reduce their operational and labour costs.
According to data published by the European Banking Authority (EBA), Cypriot banks are the first among EU member states in terms of labour costs.
Cypriot banks’ staff cost to equity ratio is 12% — the highest in the EU.