More Australians are expected to be disappointed if not angry at ANZ Bank. The bank announced on Monday a cut - not in interest rates, but in jobs.
ANZ said it will axe 1,000 jobs in Australia in the next few months. To be immediately affected are 492 employees who were told of their lay off on Monday. They are mostly middle managers and workers engaged in back office and support function. However, the bank said it would limit the number of branch staff cuts.
At the same time, ANZ would order a wage freeze in 2012 for senior officials, ANZ Chief Executive Phil Chronican said.
"A different and very difficult environment is now emerging for banks globally.... Just as we are seeing in other parts of the Australian economy, we are also having to adapt our business to the new conditions and become leaner and more agile so we ensure the bank remains strong and can grow and invest for the future," Mr Chronican said in a statement.
On Friday, ANZ announced it would raised interest rates on standard variable home mortgages by 0.67 per cent despite the Tuesday announcement by the Reserve Bank of Australia to hold overnight cash rate at 4.25 per cent. Westpac announced on the same day a 0.1 per cent interest rate increase, while Commonwealth Bank and National Australia Bank are expected to launch their own rate reviews.
Majority of the ANZ staff who would lose their jobs are in Victoria. Financial Services Union (FSU) National Secretary Leon Carter said there is no justification for local banks to cut jobs.
"With a combined profit of more than $24 billion, if anyone can afford to invest in Australian finance jobs it is our four big banks, Mr Carter said.
"At the end of the day that money is being made over the blood of people who are being booted out the door," Mr Carter said.
Mr Chronican said the bank decided to become upfront with the affected bank employees and the community about the changes the lender needs to implement and its implication.
"We are acutely conscious of the impact of these reductions on individual staff members and we will be making every effort to use natural attrition, to redeploy staff, and to utilise our training funds to support those people affected," Mr Chronican added.
The 1,000 job cuts are the latest after ANZ laid off 130 back office workers from its commercial and retail business in January.
Westpac also plans to lay off over 500 workers, while across Australia's banking industry about 7,000 jobs are expected to be axed in the coming two years. Some of the jobs that Westpac will remove will be outsourced to India.
It is not only the banking industry that is axing positions. Last week was a bad one for workers across Australia after a 102-year-old construction company announced its temporary closure which would result in the loss of 500 jobs.
Also last week, BHP Billiton, Holden, Toyota, Manildra, Thales and Reckitt Benckiser announced hundreds of lay offs due to the strong Australian dollar and weak business environment.