Kenya’s banking sector is grappling with a painful wave of mass retrenchment of workers, with 1,000 having lost their jobs in three months.
The retrenchment, which is attributed to the September cap in cost of loans chargeable on borrowers, exceeds the 711 bank employees who lost their jobs in the whole of last year.
More than six banks have announced retrenchment plans in the three months as others are also said to be quietly sending home hundreds of workers.
Increased adoption of technology is also behind the banks’ push to release workers in a bid to trim their payrolls.
Top on the chopping list is the local unit of Standard Chartered which plans to lay off about 600 workers, equivalent to a third of the bank’s total workforce, according to a filing made with the bankers’ labour union.
StanChart on Wednesday announced that 300 staff would be rendered redundant with the closing down of its Nairobi shared services centre, whose functions will be migrated to Chennai, India.
The Nairobi centre, with a staff of 350, previously provided real-time support such as accounting, reporting, systems maintenance, and information management support to StanChart’s regional subsidiaries in Uganda, Tanzania, Zambia and Botswana and South Africa.
Equity Bank a fortnight ago revealed it had sent home 400 workers in the nine months to September, continuing a trend that started last year when the lender shed 660 jobs through voluntary exits.
Ecobank has also disclosed that it will retrench an undisclosed number of employees following last week’s decision to close nine out of its 29 outlets in Kenya, cutting its branch footprint by a third.
“There may be some employees who will be rendered redundant and their redundancy will be handled as per the applicable laws of Kenya,” the Togo-based lender told the Business Daily.
“We have communicated to both the regulator and BIFU [the Banking Insurance and Finance Union] on the effects of closure of the nine branches,” Ecobank said.
Three other lenders, namely Family Bank, Sidian, and Islamic financier First Community Bank, have written to BIFU, notifying the union of an impending retrenchment.
“Our concern is that the redundancies are conducted within the law,” said Tom Odero, organising secretary of the trade union representing financial sector workers.