World Bank Job Cuts

On Friday October 31st, 2014, Sneha Shankar of the International Business Times wrote an article entitled World Bank Plans to Cut 500 Jobs Over Next Three Years in Restructuring Move. This is a major announcement, given that the jobs cut would encompass roughly 11 percent of the entire World Bank staff. The World Bank did stress that these individuals would be able to apply for positions in other divisions. And because of this, “the net result of the reorganization would be a loss of 250 positions” (Shankar, 2014).

The question regarding these cuts has to do with why the World Bank is looking to reduce jobs. It seems that “[t]he move included budget cuts worth $400 million so that the bank can lend more to middle-income countries. However, current employees reportedly claimed that the organization is focused more on cutting minor allowances for breakfast and parking instead of improving lending norms” (Shankar, 2014).

It is interesting that the World Bank may be doing this to increase its lending to middle-income states. In fact, as discussed in an article on the World Bank, this has been a criticism of the World Bank by scholars. Namely, some have argued that the World Bank has shifted from focusing on the lower economically developing states to middle-income countries that are not the ones with the most need for these loans (Lerrick, 2006). There have been a number of studies that have looked at how the World Bank is lending, to whom they are lending to, and why. It seems that the World Bank is able to make a larger profit from these sorts of loans than if they were to loan to economically poorer states. However, this seems to go against the vision of the World Bank as being a bank for economically poorer states to build their economy and development programs. It will be interesting to see if the World Bank will clarify their vision of the organization as it decides to move forward with these job cuts.