Butterfield Bank axes 25 jobs in cost-cutting restructure
Butterfield Bank laid off 25 employees yesterday, as the company restructured to cut costs in the slow economy.
The job losses were spread out across departments and levels of seniority, bosses revealed in an exclusive interview with
The Royal Gazette. The highest-ranking employee to go was a vice-president.
“This is a painful day for the bank,” Butterfield's chief executive officer Brad Kopp said.
“This is a bank that prides itself on its long-term employees. It's a like a family, so this has been very difficult.”
The numbers of Bermudians and non-Bermudians let go yesterday were proportionally similar to the bank's workforce as a whole, Mr Kopp said.
He added that fewer than ten percent of the bank's approximately 700-strong workforce in Bermuda were work permit holders.
The CEO said business conditions were difficult and that bosses felt the company had needed to be “right-sized” according to its revenues.
There were no plans to make further redundancies, Mr Kopp added.
The bank had cleaned up its balance sheet and secured new investment over the past two years and the next stage was to start making money again, he added.
The job cuts are part of a wider efficiency drive.
“Over the last two years we have used attrition to bring down our workforce and we have asked 60 people to leave in other jurisdictions,” Mr Kopp said.
The bank operates in six other jurisdictions, including the Cayman Islands, The Bahamas and the UK, and the group employed 1,519 people at the end of 2010.
“Letting people go in Bermuda was a last resort for us, as we know it's a very difficult economy right now,” Mr Kopp added.
“We were extremely generous in what we gave people. It far exceeded what the law requires.”
The redundancy benefits included financial compensation, health benefits for six months, assistance in trying to find a new job and, for those who had mortgages, some mortgage assistance, Mr Kopp said.
The Royal Gazette understands that among the laid-off staff were nine security guards, whose jobs were to transport cash from branches around the Island.
One of them told this newspaper they were brought to the Hamilton branch yesterday lunchtime to be told the news.
“None of us know what we are going to do. These are hard times,” said the man, in his 40s, who asked not to be identified.
“We have been working 14-hour shifts recently. None of us had been told anything about this until right now. We thought we were secure so this has come as a shock.”
The man said some of the workers had been there as long as 12 years. He said they had been given three weeks' pay and were told they were being made redundant with immediate effect, he said.
He said they had asked bosses whether the security work would now be subbed out, hoping they could get jobs with whoever takes over.
“They said they are not in a position to say. That's all we were asking for, but they wouldn't tell us,” he said.
Mr Kopp declined to comment on the security guards' case, except to reiterate that the bank had been generous with the packages it had given and that this was its way of showing its respect for the departing employees.
He added that there were no plans to replace any of the employees let go with an outsourced alternative. “We're just going to do things differently and more efficiently,” he said.
Last year, Butterfield posted a net loss of $207 million, driven mainly by selling off the troublesome investments tied to US residential mortgages that had caused huge losses at the bank over the past three yeas as the American housing market plummeted.
Last year a group of new investors pumped $550 million into the bank, which helped it back to stability.
Michael Collins, senior executive vice-president, Bermuda, one of the raft of new faces introduced in a complete overhaul of senior management over the past two years, said: “There are three stages to our recovery; cleaning up the balance sheet, dealing with the mortgage-backed securities and bad loans were the first two, which we have completed.
“The third stage is about earning money - now we have to show some quarterly earnings growth.
“Butterfield has a large infrastructure for a bank of its size, and Bermuda is an expensive place to operate. So we need to right-size the infrastructure to meet the business conditions.”
Mr Kopp said another cost-cutting measure had included the installing of a new telephone system that could save the company about $1 million.