African Bank set to start retrenchments
Job cuts on the cards at African Bank.
Business Day reports that African Bank has tabled retrenchments as the financial service industry contends with a recession and consumers increasingly default on loan repayments.
The bank said of its 3,728 employees, about one-third or 1,269 would be affected by the process, but only a quarter, or 317 employees of those affected, are likely to lose their jobs.
The layoffs come as the banking sector faces losses from increased consumer defaults due to the recession, in addition to devastated household and business finances brought on by Covid-19 restrictions.
African Bank chief executive Basani Maluleke said they have been deliberate in reducing costs in all areas of the business, and undertaking a consultation process with their employees is the last resort in reducing costs.
“Given the financial pressure faced by our customers, the bank has recorded a reduction in sales as well as collections, which has created excess capacity across the different business units,” Maluleke said.
The retrenchments also highlight a move across the industry to phase out redundant jobs in bank branches as consumers turn to electronic devices for banking services. African Bank indicated it had been in the process of automation across its operations and had made services and products available online. These changes have made the bank evaluate its existing resource capacity, the company indicated in a statement.
African Bank is in the middle of transforming itself from a primary unsecured lender to a bank with a wider suite of products after collapsing under a mountain of highly lucrative but risky consumer credit in 2014.