Bank of Queensland makes ‘difficult but necessary’ decision to axe hundreds of jobs

Bank of Queensland has called its latest round of job cuts “difficult but necessary” as it prepares to have a new operating structure largely in place by late next month.

Bank of Queensland CEO Patrick Allaway told staff the executive team had made “difficult but necessary decisions” to lower costs. Picture: NCA NewsWire / John Gass

Bank of Queensland aims to have a new operating structure largely in place by late next month, according to sources, as its executive team makes “difficult but necessary” decisions to axe a further 400 to 600 jobs.

The Australian understands the sweeping job cuts will touch all of BOQ’s banking divisions and span support areas such as marketing and human resources.

Separate lots of information will be provided across different BOQ divisions in coming days, around how the headcount reductions will play out in different areas of the bank.

The Australian revealed on Tuesday that BOQ had begun consulting with employees as it looked to axe hundreds of roles across several business units.

BOQ’s shares rose 0.8 per cent to $6.42 on Wednesday, outpacing a 0.2 per cent gain in the S&P/ASX 200. The bank is pursuing a financial year 2026 simplification program that is aimed at generating $200m in cost savings.

The program sees more than 400 full-time jobs lost in this round of headcount reduction, with some sources suggesting further deep cuts may eventuate as the bank seeks to reach its cost-saving targets. That is on top of BOQ cutting 220 jobs almost a year ago to simplify its operations, as it also worked to bed down its purchase of ME Bank.

In a memo sent to staff and obtained by The Australian, BOQ chief executive Patrick Allaway said the latest round of job cuts would include current and vacant roles. “The executive team has made difficult but necessary decisions to ensure BOQ can lower its cost to serve and create more sustainable returns in a highly competitive market,” the memo states.

“Yesterday (Tuesday) we started the consultation process across the group for further simplification of our operating model.

“We are committed to ongoing and constructive engagement … we are working closely with impacted team members, providing the appropriate support.”

But the Finance Sector Union hit out at BOQ on Wednesday over the bank’s handling of the job cuts and a short consultation period for employees swept up in the changes.

“People are feeling very very distressed and anxious about what this all means for them,” FSU national secretary Julia Angrisano said. “Consultation is due to conclude on September 5, which is in two weeks … the whole business is going to be impacted by this.”

Ms Angrisano said the bank wasn’t allowing much time for any feedback to be taken in and acted on after the consultation with employees before instituting its new structure.

MST Marquee analyst Brian Johnson told his clients with an August 2024 financial year end, BOQ’s shedding of so many staff close to year end could imply “little progress” on realising cost efficiencies in the latter half of its year. “We don’t think this quantum of cost savings is achievable,” he said, also noting the potential for a “significant unexpected below the line restructuring charge” at BOQ that would reduce the bank’s net book value.

“Front-book mortgage pricing remains below the cost of capital through the mortgage broker channel.

“Banking is a scale game and with 2.7 per cent/2.3 per cent housing/deposit share we can’t see BOQ earning its cost of capital.”

BOQ’s slated headcount reductions are sizeable given its latest annual report showed the bank had 3163 staff, although that figure doesn’t include headcount reductions since the report was published. It also doesn’t include BOQ owner-managed branches.

The bank’s latest accounts showed it had 22 corporate branches and 121 owner-managed branches. BOQ’s interim results, handed down in April, showed a drop in cash profit as net interest income fell and operating expenses climbed.