Westpac to Cut 132 Jobs, Outsource Roles to India and the Philippines

By Jeff Gibbs

Westpac Bank is streamlining its operations, announcing plans to cut 132 jobs from risk management, operations, and sales departments. This reduction includes 70 roles that will be outsourced to India and the Philippines, reflecting the bank’s efforts to align its cost base with slowing credit growth.

The Finance Sector Union (FSU) was notified about 112 of these cuts, following the announcement of 20 job losses in January.

These reductions follow approximately 1000 staff cuts across business and retail banks last year as Westpac aims to meet aggressive cost targets under investor pressure.

1. Westpac Bank is implementing significant job cuts, totalling 132 positions, across risk management, operations, and sales departments, as part of its efforts to streamline operations in response to slowing credit growth.

2. A notable aspect of the job cuts includes the outsourcing of 70 roles to India and the Philippines, reflecting a broader trend in the banking industry to tap into skilled talent pools in South-East Asia to reduce operational costs.

3. The Finance Sector Union (FSU) has expressed concerns about the impact of these cuts, particularly in core risk and compliance functions, and fears that continued outsourcing may lead to job insecurity among employees.

While these cuts represent a small fraction of Westpac’s workforce of 36,000 employees, outsourcing to SouthEast Asia is part of a broader industry trend, tapping into the talent pools of the subcontinent where skilled workers cost significantly less than in Australia.

Genpact, Tata Consulting Services, and Concentrix will handle the offshored

A significant surge in Australian homeowners facing mortgage stress has been recorded, with a record number now at risk, and the potential for thousands more to join them if the Reserve Bank proceeds with another interest rate hike next month. According to Roy Morgan, in January 2024, 1.609 million households were deemed at risk of mortgage stress, marking an increase from the 1.56 million recorded in August and September. This rise has been attributed to the

Reserve Bank’s decision to raise interest rates to the current level of 4.35 per cent on Melbourne Cup Day.

Roy Morgan CEO

Michele Levine highlighted the concerning trend, noting that the number of mortgage holders at risk had risen by 82,000 from December and 119,000 since November when the RBA implemented the interest rate hike.

This brings the total increase since the RBA began raising rates in May 2022 to 802,000 mortgage holders facing potential stress. Despite a temporary reprieve from rate increases between July and October 2023, the November hike reignited pressure on mortgage holders.

The latest figures indicate that 31 per cent of mortgage holders are now at risk, the highest proportion since the Global Financial Crisis. Of particular concern is the number of homeowners deemed “extremely at risk,” which stands at 994,000 or 19.8 per cent, exceeding the long-term average. However, it is slightly lower than figures recorded earlier last year. roles, primarily in head office and operational functions. These changes affect less than half a percent of Westpac’s workforce.

Looking ahead, Roy Morgan predicts a further increase in at-risk mortgage holders to 1.64 million in April if the Reserve Bank proceeds with another interest rate hike in mid-March. However, with today’s release of flat monthly inflation data at 3.4 per cent for the year to January, the likelihood of a rate cut seems remote, although not entirely off the table. Canstar’s Steve Mickenbecker suggests that the Reserve Bank may be inclined to consider rate cuts sooner than expected, especially with quarterly inflation readings showing promising signs. While a rate cut may not be imminent, the June quarterly release could provide a clearer indication of the Reserve Bank’s stance and its potential impact on borrowers.

The move also includes outsourcing roles in Westpac Institutional Bank and consumer finance operations to Genpact and Concentrix, respectively. Tata will handle tasks in corporate lending and technology, reflecting the bank’s strategy to optimize its operations.

The decision to outsource jobs has raised concerns from the FSU, particularly regarding cuts in core risk and compliance functions.

The union fears that continual outsourcing sends a message of job insecurity to employees. In response to margin pressures, the big four banks, including Westpac, have intensified their belt-tightening measures, resulting in over 2000 redundancies in 2023. Westpac alone has slashed 4000 fulltime equivalent positions in the past two years.

While Westpac declined to disclose the exact number of contractors in India and the Philippines, ANZ Bank boasts the largest presence in India, with 8000 staff, followed by Macquarie with around 1800 employees.