World Bank leaders planning staff cuts

World Bank leaders are gearing up for a daunting task: cutting the number of staff especially at the multilateral institution’s cushy Washington headquarters without prompting popular dissent. Rumors have been flying about impending job cuts since last fall, when senior management announced the goal of slashing $400 million from the bank’s operating budget as a part of President Jim Kim’s ambitious reform plans. But until recently, they were just that — rumors. Since March, all new hires must be approved at vice president level and external candidates require confirmation by the chief financial officer and chief operating officer, two of the most senior posts at the Washington, D.C.-based institution — not just by managers in the different units as was the norm until then — a move meant to rein in hiring, as Devex reported at the time. Last week, agency leaders informed staff that further savings would result from changes to corporate procurement and the engagement of external consultants as well as a reduction of the bank’s “footprint” in Washington. This week, a draft announcement was leaked and began to circulate inside and outside the bank that provides insight into the proposed staffing cuts. While the announcement is expected to change before it is shared with the multilateral institution’s employees, it represents an important milestone in a carefully orchestrated rollout of contentious reforms that have already lowered staff morale at the world’s largest multilateral bank. The measures outlined in the document call for staffing plans in the bank’s institutional, governance and administration units to be completed by September 30, 2014, and for operational units by March 31, 2015. The operational units include the newly formed global practices and cross cutting-solution areas. The draft memo stresses that some savings will be gleaned from “natural attrition” and that managers are advised to fill vacancies through internal redeployment first, with the added support from the human resources department. Additional cuts would be made based on “business needs”; there are no plans for a voluntary severance process “at this stage,” according to the draft. The memo does not mention specific members of the World Bank Group such as the International Finance Corp. or the Multilateral Investment Guarantee Agency. The leak of the document caused a stir at the bank. In an apparent effort to regain some control over the announcement, bank management sent a note to staff about the leak. It said that the draft announcement had been “inappropriately shared with an external party” causing “unnecessary confusion” and promised to provide more clarity on staff cuts next week, according to sources at the bank. World Bank spokesperson David Theis told Devex that the bank was “not going to comment on a leaked draft document.” He also declined to comment on the internal message about the leak. Kim addressed the prospect of job cuts at length in an interview with the Guardian last November. "We are here for a purpose, and everyone who is contributing to that purpose will stay,” he said at the time. “And for those who are doing less to contribute to that purpose, we are going to have find ways to exit them. Yes, there will be a lot of people who will be very unhappy with me but we are doing this because of the mission. We are not doing this out of spite; we are not doing this just to cut numbers." A large majority of bank employees have so-called “term appointments,” contracts that are renewed every few years, but are sometimes as short as a year. Those with upcoming contract renewals may now be feeling particularly vulnerable. Staff with open-ended contracts appear to be more protected from cuts, although that remains to be seen. Stay tuned to Devex for more news and analysis of this continuing story. Read more development aid news online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day.