Public sector bank restructures

In early 1999, Austria's Post Office Savings Bank is preparing for privatisation - that is, sale to another bank - probably in 2000. However, the process of reducing employment in the run-up is creating less tension than speculation about potential future owners and their intentions.

In the wake of privatisation and greater profit orientation, the Austrian banking sector is undergoing a process of forming larger enterprises or strategic partnerships. This has been coupled with a reduction in staff that has been accomplished by encouraging retirement (AT9901121F). The forthcoming sale of the Post Office Savings Bank (Postsparkasse, PSK) is another such instance. The government intends to sell 49% of PSK, which is currently fully owned by a state-owned holding company.

These plans for PSK have been part of official policy since 1997 but the actual sale was put off and may not take place until 2000. Rumour has it that the holding now intends to sell 75% of the bank in a bid not only to raise more income but also to facilitate a rationalisation of banking across the country. The PSK works council, up for re-election, has voiced its concern that PSK would, after a majority sale, be broken up by its new owner, at the expense of its current employees.

By comparison, the management's commitment, regardless of any sale, to a reduction of employment from nearly 2,200 now to about 1,700 by the year 2002 is creating little tension. Between 70 and 100 employees retire or quit voluntarily per year. An early retirement scheme is being negotiated between management and the works council to cover the remainder of the workforce reduction. Putting the cost-cutting plans in place will be essential to obtain a good price for PSK. This is also the core reason for putting off the sale.

Industrial relations at PSK have been adversarial since the drive to make it fit for privatisation was begun in earnest in 1996 (AT9706117F).