Lebanese banks witness mass layoff

Beirut, March 6 As the continuing economic crisis heightened by the Covid-19 pandemic was deepening, banks in Lebanon were witnessing mass layoffs.

After an exodus of the US dollar and a sharp depreciation of the national currency, the Central Bank of Lebanon recently tightened regulations against the country's banks, which compelled some of them to close branches and lay off employees to stay afloat, reports Xinhua news agency.

"It's been a crazy week as our bank decided to lay off around 400 out of 2,000 employees amid the current banking crisis," a human resource officer at a bank in the capital Beirut told Xinhua on Friday.

The officer, said he had been working overtime every day just to prepare the layoff documents of the employees.

Assad Khoury, president of Federation of Syndicates of Banks Employees in Lebanon, told Xinhua that the union has prepared a proposal that requires banks to pay all fired employees a fixed compensation package equivalent to 18 months' salary in addition to a two-month salary for each year of work.

The union leader also said he has been working with MPs to pass a law that aims to protect bank employees in a situation like the current one.

"We have to pass a law in this regard as we expect the number of banks' employees to be fired to reach 5,000, which may create a social problem," Khoury explained.

Meanwhile, Ghassan Ayache, former Vice Governor of the Central Bank of Lebanon, told Xinhua that the banks' decision to reduce costs is an inevitable consequence of the contraction in banking activity and the financial crisis prevailing in the country.

However, Ayache asserted that banks are keen to take such measures without causing a new social problem, especially considering the number of banks' employees that exceeds 25,000.

"Banks are keen to reach a mutual understanding with employees over acceptable compensation schemes," he said.

Due to the continued political instability and raging Covid-19 pandemic, Lebanon has been suffering from an economic crisis.

The national currency has also slipped to a new low of 10,000 Lebanese pounds per $1.

( With inputs from IANS )