Glitnir banki hf. - Company Announcement

Glitnir aligns its operation to a changed market environment - Organisational layoffs in Iceland completed

Reykjavík  14  May  2008    Glitnir  Bank  has  today  completed  its
organisational layoffs in Iceland,  which has led  to a reduction  in
number of employees by  88. Those involved come  from all levels  and
divisions within the Bank's operations. This means that the number of
employees in Iceland will decrease to  ca. 1000, which is similar  to
the size of the work-force at the beginning of 2007.

The turbulence in the international financial markets has, in a short
period of  time, changed  the operational  environment for  financial
services firms worldwide. Icelandic financial companies have not been
unaffected by these developments.

Since the autumn of 2007, Glitnir has demonstrated its flexibility by
responding  to   the   changed   operational   environment   in   the
international financial markets, by reducing costs at home and in its
operations internationally.

Glitnir's international operations re-organised
Since the beginning of 2008,  Glitnir has reorganised its Nordic  and
European  operation  to  increase   focus  and  improve   operational
efficiency.


  * The Bank's office in Denmark was closed in February and a part of
    its operations transferred to London and Reykjavik with a
    reduction of 15 job positions.
  * The Bank's operation in Norway was merged and reorganised. This
    led to a reduction of 70 job positions.
  * Glitnir announced its exit from the commercial property financing
    business operated out of Luxembourg in April, freeing up
    liquidity of up to EUR 1 billion over the next 12 months and a
    reduction of 10 job positions
  * The Bank's operation in London was reorganised at the end of
    April with a reduction of 10 job positions.


Cost-cutting initiatives in Iceland
Glitnir Bank has also been seeking means to lower costs and  increase
efficiency in  its  Icelandic  operation. A  general  cost  reduction
scheme was initiated at the end of last year, new hiring's have  been
kept minimum and vacant job positions have not been filled.

In April the Bank's two branches  in Kopavogur were merged into  one.
Glitnir will now merge two of its branches in Reykjavik,  emphasizing
specialized services for SMEs out of the merged branches.

In 2007 Glitnir hired 319 employees in Iceland, the highest number in
the Bank's  history.  The  Bank's  strategy was  based on  plans  for
continuing  brisk  growth;  however  external  circumstances  changed
swiftly.  Consequently, the Bank has decided to reduce the number  of
employees in  Iceland by  88.  The employees  in question  come  from
different levels,  departments and  divisions  across the  bank.  The
group consists of equal number of  males and females, average age  is
ca. 40  years, and 2/3 of the employees have worked for the Bank  for
less than five years.

As a result of these actions, job positions at group level have  been
reduced by 255 due to lay-offs and retirement. Most of those affected
will leave their  positions immediately.  The Bank  has informed  the
appropriate authorities and the  Confederation of Icelandic Bank  and
Finance Employees about the redundancy programme.

The reduction means that that the number of employees in Iceland will
be close to 1000, similar to what it was in the beginning of 2007.

Lárus Welding, CEO of Glitnir Bank:"This difficult decision marks the end of the organisational  layoffs
cutting  scheme  which  was  initiated  in  the  end  of  2007.   The
operational environment for  financials has changed  in a very  short
period of  time  and  it's important  that  all  companies  concerned
demonstrate flexibility and the ability  to reduce costs under  these
trying circumstances.

These are painful measures and which entails that good people will be
leaving us and I  wish them all  the best for  the future. There  has
always been a strong demand for Glitnir people in the job market  and
I am confident that those that are leaving will find exciting  future
employment opportunities.

Circumstances and the financial market environment have changed which
makes  it  important  to  show   flexibility,  to  create  a   leaner
organisation  and  to  strengthen  our  competitive  position.  I  am
confident that  this will  make the  bank even  better positioned  to
seize opportunities in the current environment and in the future."


Further information:
Bjørn Richard Johansen, Managing Director, Global Corporate
Communication
Mobile: +47-47 800 100, E-mail: brj@glitnir.no
Már Másson, Head of Corporate Communications, direct: 440-4990,
mobile: 844-4990, e-mail: mar.masson@glitnir.is

Attachments:

Press release (PDF)