by Najia Houssari arabnews.com — BEIRUT: Lebanese banks are quietly letting employees go as they seek to close branches and reduce operational costs amid the collapse of the local currency, the Lebanese pound. It comes after the country’s central bank tightened regulations against commercial banks. While some are downsizing domestically, other banks are opting to sell assets abroad. The number of branches estimated to have closed ranges between 300 and 400 out of a total 1,100. Employees and contractors have been the first to feel the effects of the decisions. George Al-Hajj, president of the Federation of Syndicates of Bank Employees, said that 2021 has been “very hard” for bank employees in Lebanon, adding: “Although no statistics have been conducted to show the exact number of laid-off employees, their number does not exceed 4,500.” But more bank workers are expected to be dismissed in the near future. “We are in the middle of the storm, and the crisis will persist until Lebanon reaches an agreement with the International Monetary Fund on the restructuring process of the banking sector,” said Al-Hajj.
The number of employees of the banking sector in 2018 was estimated to be about 26,000, working for 61 banks. Since 2019, the sector has lost more than 17 percent of its workforce. Dr. Jassem Ajaka, an economic and strategic expert, warned that “up to 50 percent of bank employees will be laid off.” He told Arab News: “After the deterioration of the economic situation and the suspension of banking activities due to the decision to block financial transfers, the banking sector is no longer making profits. “Banks are not charities, and the reality is hard for everyone.” “The banking sector’s employees constitute a very important share of the middle class in Lebanon and eradicating this group from the economy will further harm Lebanese society.” Al-Hajj said: “In 2019, the federation saw this crisis coming and urged banks seeking to fire employees to inform the Ministry of Labor of their intentions. Some banks did, but others did not, and thus we do not know the exact number of laid-off employees.” He added: “The banks’ excuses for mass lay-offs were many: Sometimes it was because the bank was applying an early retirement system, sometimes it was a resignation at a request from the administration, and other times it was the termination of contracts due to economic reasons.”