Westpac To Lay Off 300 Employees In The Business And Retail Unit

Westpac Banking Corp, a lender based in Australia, has announced plans to trim around 300 jobs in the consumer and business banking divisions. These jobs will be trimmed at a time when the company is witnessing significant growth in profits amid an increase in interest rates and skyrocketing inflation.

Westpac plans to lay off 300 employees

On Friday, the Finance Sector Union of Australia (FSU) released a statement saying that the third-largest bank in the country, Westpac, would be reducing the number of employees in the Consumer and Business Banking Division according to an internal memo that was seen by the Union.

The potential layoffs that have been announced by the lender equate to 0.8% of the total full-time equivalent workforce of 37,476 as of September 2022. The union has condemned these layoffs saying that the company was already overburdening the available workers and that another reduction of the numbers would make the matter worse.

“Westpac workers have already been struggling with excessive workload demands, and these cuts mean those who are left behind will need to do more with less,” said the FSU National Secretary, Julia Andrisano.

In May, Westpac, alongside some of the largest lenders in the US, such as ANZ Group, National Australia Bank, and DBS Group based in Singapore. These lenders have also warned about the pressure that this move will have on the net interest margins of these banks in the coming days as the interest rate cycles near the peaks.

Westpac’s first half results beat estimates

In May, Westpac, which is the second-largest mortgage provider in Australia, reported a 22% growth in net profits for the first half. These profits came in at AUD4 billion, equivalent to $2.7 billion, as the levels of inflation continued to remain high.

During the period, Westpac also reported costs of AUD5 billion, which was a drop from the AUD5.2 billion that was seen a year earlier. During the previous years, the costs reported by the bank for the first and the second half of a financial year remained flat.

While releasing these financial results, the bank had said there was a plan to release its cost-to-income ratio. This ratio would illustrate the performance of the bank in comparison to its competitors to help shareholders determine value.

These financial results also show how the mortgage market, which used to make up a significant portion of the retail bank earnings in Australia, has become a tough space for most lenders. Some of these lenders have said that they will focus their attention on other businesses to increase their profits.

Westpac is also planning to redirect resources to institutional banking and finance the transition from fossil fuels to renewable energy. However, the bank did not share more details on the matter. Last year, Westpac reported an interim dividend of 70 Australian cents per share, which was an increase from the 61 Australian cents that was reported last year.