Allied Irish Bank (AIB) is planning to slash about 1500 jobs through negotiated voluntary severance by the end of 2022.

AIB CFO Donal Galvin announced: “The way in which we deal with employees in situations like this is to negotiate voluntary severance agreements for our staff members who and where this could be an interesting opportunity for them.

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“We will see reductions over the coming three years of approximately 1,500 staff.”

The redundancies represent approximately 15% of the bank’s overall workforce, which already fell 3% at the end of 2019 to 9,520 employees.

Galvin added that the move will affect head office type jobs and the teams working on reducing the bank’s bad loans.

The decision is part of the company’s strategy to reduce costs as a consequence of a significant drop in profits.

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AIB reported pre-tax operating profits of €1.09bn for the year 2019, a decline of almost 22% compared to €1.4bn a year ago.

The company is now targeting more than 8% return on tangible equity by 2022 to boost its profitability.

Its shares fell 3.1% to €1.84 and have fallen almost 60% since its IPO in June 2017.

Job cuts in the UK banking sector:

Last week, Barclays announced plans to close its Leeds branch that is expected to affect over 1,000 jobs

Last month, Lloyds Bank unveiled plans to eliminate 780 jobs across the UK branch network.

Another British banking major HSBC said it will close 27 branches in the UK and also announced plans to lay off 35,000 employees across the US and Europe.

Royal Bank of Scotland (RBS) also said it plans to cut thousands of jobs at Natwest as a part of its cost-cutting strategies.