The restructuring events database contains factsheets with data on large-scale restructuring events reported in the principal national media and company websites in each EU Member State. This database was created in 2002.
Financial Services Financial And Insurance Activities Financial Service Activities, Except Insurance And Pension Funding 64 - Financial service activities, except insurance and pension funding
500 - 600 jobs Number of planned job losses
Announcement Date
18 May 2022
Employment effect (start)
18 May 2022
Foreseen end date
31 December 2022
Description
The management of the Bank of Cyprus, the largest listed company on the Cyprus Stock Exchange in terms of market capitalization, announced their plan for the reduction of branches by 25% and the reduction of staff by 15% for 2022 (500/600 people), as part of their announcement for the quarterly results for the current year. The bank's management came to this decision despite reporting profits of ~21 million for the first quarter of 2022, almost three times as much as the profits of 8 million in the first quarter of 2021. The bank expects an increase of the cost-to-revenue ratio in 2022, mainly due to investments in automation and the company's ongoing digital transformation program. A small number of employees have already left the company in the first quarter of 2022 (the bank employed 3,438 people on December 31, 2021, the number dropping to 3,395 people by March 31, 2022) mainly due to a small-scale Voluntary Retirement Plan for full time employees by one of the bank's subsidiaries; the total cost amounted to ~ 3 million. Total personnel costs amounted to 50 million for the first quarter of 2022, at the same levels on a quarterly and annual basis as last year, as a result of voluntary retirement plans; however, the renewal of the collective agreement in 2021 is expected by management to cause an acceptable increase in personnel costs of 3-4% for the years 2021 and 2022.
UPDATED 25/07/2022
Bank of Cyprus announced that 550 employees chose to participate in the Voluntary Retirement Plan and will be leaving the company, apparently meeting the targets of the company. It is estimated that the financial cost of the tax-free compensation that will be granted according to the Plan will amount to 99 million, while the departure of the 550 employees will allow to save around 37 million (circa 19% of current personnel costs).
It is important to note that, reportedly, the number of employees who expressed interest in participating to the plan was even greater, however the management did not allow the exit to those who were considered necessary for the bank's operations. At the same time, there is a number of employees who did not express their interest in the voluntary retirement plan despite significant recommendations, because they work in departments or stores where the operations have been suspended or are about to be suspended. It is uncertain what Bank of Cyprus will do with these employees: they will have to consider other methods of staff reducing.
Eurofound (2022), Bank of Cyprus, Internal restructuring in Cyprus, factsheet number 106817, European Restructuring Monitor. Dublin, https://restructuringeventsprod.azurewebsites.net/restructuring-events/detail/106817.
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