World Bank to cut 500 jobs in some units as part of revamp

WASHINGTON (Reuters) - The World Bank said it plans to cut 500 jobs over the next three years as part of a broad restructuring meant to make it more efficient but that has rattled employees.

World Bank President Jim Yong Kim speaks on a panel titled "Building Shared Prosperity in an Unequal World" during the IMF-World Bank annual meetings in Washington October 8, 2014. REUTERS/Jonathan Ernst

The long-expected layoffs, along with budget cuts and internal reorganization, have sparked regular staff protests and fears of a broader revolt at a time when the bank is trying to ramp up its work in fighting the Ebola outbreak and other global challenges, and maintain its relevance.

The cuts, announced on Thursday, represent about an 11 percent reduction in the 4,500-employee workforce of the bank’s internal-facing divisions, including finance, human resources, research and security. These divisions employ about a quarter of the bank’s total staff.

The bank also plans to cancel 70 vacant job openings, though it wants to hire 250 to 300 new people, largely in its Chennai, India office, which runs some of its administrative and other operations.

Some of the 500 employees whose jobs will be cut will also be able to apply for jobs in other World Bank divisions, said the bank, which provides financial and technical assistance to developing countries.

The net result will be a loss of about 250 positions, World Bank President Jim Yong Kim said in a note to staff on Thursday.

“Staffing decisions are always challenging,” Kim said in the note, which was obtained by Reuters. “But we feel confident that the changes we are making will help us better align our staffing to our strategy, which is what our clients want and what we must deliver.”

Kim launched the first major reorganization for the lender since 1996, to make it more selective and better attuned to the needs of the governments it serves.

The reorganization has entailed $400 million in budget cuts to make the institution more competitive with development rivals and allow it to boost lending to middle-income countries.

Employees complain the bank is overly focused on minor cuts to areas such as breakfast allowances and parking instead of dealing with meaningful changes to the quality and efficiency of the bank’s lending.

Staff were also incensed after discovering the bank’s chief financial officer, who has pushed much of the cost-cutting, received a $94,000 bonus this year. To quell staff discontent, Bertrand Badre earlier this month said he would forego the $24,000 or so of the bonus that he had not yet received.

But that has not stopped employees from organizing regular work “stoppages” on Thursdays, advertised via yellow flyers of unknown provenance.

About 300 staff showed up at the latest meeting earlier this Thursday, according to one attendee, to discuss the declining quality of World Bank projects and the so-called “expenditure review,” among other issues.

The bank plans to announce further details about the budget cuts and layoffs next week, Kim said in the note to staff.

Reporting by Anna Yukhananov; EDiting by Steve Orlofsky