Jitters grip KCB staff as lender to axe over 500 employees
By Standard Reporter | February 21st 2017
The country’s biggest bank by assets Kenya Commercial Bank is to lay off hundreds of its workforce as tough economic conditions bite.
The subtle programme may be targeting over 500 employees with an offer for early retirement, according to industry sources.
Those privy to the Human Resource strategy say the employees have been offered to leave voluntarily or be subjected to a review that could see them axed without getting a lucrative severance package.
The move has sent jitters through most of the company’s workforce who are not unionisable after taking up an earlier offer to be promoted to management level.
“They were offered promotion to management level A and they took it, which is equivalent to a section head although they lose out on the union,” said a source who declined to be named.
Contacted for comment, KCB’s management has, however, denied flouting the law in carrying out the process.
“The process is being handled in accordance with the law,” the bank told The Standard in an emailed statement, adding that the subtle layoffs are part of a strategic move to realign the business.
“KCB has over the past two years been reviewing its operations in an effort to improve efficiency, serve our customers better, and meet the expectations of our shareholders,” said the bank. The lender said the review is an ongoing process aimed at reorganising the bank’s workforce.
“This has been done in keeping with the best business practice in an industry that is undergoing a major transformation driven by fast evolving technology changes and a dynamic regulatory regime.”
Six banks have announced layoffs, staff cuts and branch closures in the last six months, since Kenya legislated a limit on interest rate chargeable on loans. They include First Community Bank, which does not even charge interest. This has raised concern of a concerted effort by the lenders to hide behind the new law in effecting the unpopular strategy of going digital at the expense of employees.
The job cuts, which began after the McKinsey-led digital channels transformation on Cooperative Bank in 2014, saw the lender thin staff from 4,000 to the current 3,600 through retrenchment and natural attrition and replaced them with agents even in the banking halls.
In December, the National Bank of Kenya announced plans to lay off staff and offer an incentive of early voluntary retirement starting last month.
Sidian Bank also announced that it would reduce its workforce by 108 employees, saying it is looking at using technology more to deliver services to customers.
Family Bank is also downsizing as so is Standard Chartered, which also plans to lay off about 600 workers.
Prices of juices and water to increase on higher excise duty
- State woos firms to expand special economic zones
- Tullow increases Turkana oil field costs to Sh374b
- Address construction sector challenges, architects urge Nairobi county government
- Kenya at risk of defaulting on loans, warns Central Bank boss
- House hunting apps giving agents a run for their money