The chief executive of Norway’s biggest and highly profitable bank, DNB, has found himself in a major clash with thousands of employees over a controversial reorganization that’s led to job cuts, demotions and widespread insecurity. Nearly 200 middle managers have already lost their positions and now the labour organization representing thousands of other DNB staff is threatening to sue.
Newspaper Dagens Næringsliv (DN) reported on Thursday that Bjerke, who already has demoted nearly 20 percent of middle management since New Year, took another radical step last week that employees clearly feel was especially brutal: DNB sent out notices to several thousand of them in the days just prior to the 17th of May holiday on Friday, informing them that they’d all have to reapply for new types of jobs in a new organization. The application deadline was set for midnight on Tuesday, the day everyone returned from the four-day holiday weekend.
DN reported that Bjerke intends to use the same procedure in all departments of the bank, which has been reporting record profits in recent years while already undergoing major restructuring and cost-cutting efforts. Headquarters staff recently moved to a new building on Oslo’s eastern waterfront, for example, where no one was given assigned office space and designers deliberately allotted fewer desk or work spaces than there are employees. That reportedly has led to tensions as well, as employees feel a need to get to work extra early in the morning in order to claim a spot to work.
Legal challenge
Now Bjerke wants to reduce total staff by around 1,500 persons. Employees are extremely upset about his methods, and those of his fellow executives, and the labour organization representing the largest number of them at DNB, Finansforbundet, is threatening to sue.
“We believe that the process at DNB violates central portions of arbeidsmiljøloven (the law governing working conditions in Norway),” Pål Behrens, a lawyer and leader of the judicial department at Finansforbundet, told DN. The labour organization represents 6,500 employees at DNB, around half of the bank’s total staff.
“As we understand it, employees are essentially being released from their positions and must reapply for the own and new positions,” Behrens told DN. “We believe that’s against the rules and Finansforbundet won’t accept such methods. If the process of letting people go like this continues, we will go to court.”
Calling for a ‘time-out’
He said the process led by Bjerke also has failed to involve the employees’ elected representatives at their workplace (called tillitsvalgte, literally, those who have the employees’ vote of confidence). “They haven’t been involved in the decision to release employees from their positions, nor have they been involved in helping shape the new categories of jobs or drafting how persons to fill them will be selected,” Behrens told DN. “That’s a violation of our labour contract.”
Behrens also contended that employees aren’t being given any time to adapt to the new demands of the new positions, and Finansforbundet is itself demanding a “time-out” in the entire staff reduction process.
CEO admits ‘it can be tough’
Bjerke wrote in an internal bank blog reported by DN in March, after the middle management positions were eliminated, that change “will always lead to insecurity, protests and an enormous need for information along the way. Those who think that we can make changes without cost are wrong. But my impression is that this has been basically well-handled.”
He also wrote that “we have said that the number of employees will be reduced by 10 to 15 percent by 2015. Staff and support resources will be reduced by 30 percent. Bank offices will be shut down or merged. We will no longer do all the things we have been doing.
“But I see (what’s going on), and I know it can be tough,” Bjerke continued, before borrowing some lines from Norwegian songwriter Bjørn Eidsvåg: “I can write about the steps you need to take … but you must take them yourselves.”
Criticism refuted
DNB’s now-painful reorganization started in January, when several new corporate executives were named and former core “retail” operations were split into personal and company customer areas. The number of management levels was cut, especially those working as regional managers or branch managers.
Solveig Hellebust, DNB’s personnel manager (now called HR-director), refutes the criticism from Behrens and Finansforbundet. “We are following both the law and the contracts we have with the employee representatives in this process,” she wrote to DN in an e-mail. “We think we have a constructive cooperation with (them), but we do disagree on individual elements in such a comprehensive process.”
She admitted the staff-cutting process was “demanding and difficult” but insisted the bank must cut the number of employees “considerably” to reduce costs and meet new capital requirements set by the state.
Vigdis Mathisen, the employees’ lead representative, said she’s received “very many” calls for help from employees in despair, with Behrens saying he’s received more than 100 himself. “Folks are uncertain and worried over what’s happening,” Mathisen said. “When we see how great the the worry and unrest is already, we must ask management to stop up, and get the process on a more constructive track.”
Views and News from Norway/Nina Berglund
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