First Community Bank sacks employees in cost-cutting plan

First Community Bank plans to reduce its workforce, making it the latest lender to downsize in order to reduce costs.

The lender in a memo to staff on Friday noted costs had stayed up despite efforts over the recent months to contain them and had been left with no options but to send home some of its employees.

The memo by First Community Bank Chief Executive Officer Fazal Saib said the number of people that would be sent home would be determined by an evaluation of employee skills, the number of staff per function and employee attitude.

Saib added that the institution had hired a consulting firm to help with the staff rationalisation, including identifying the employees whose roles would be rendered redundant.

“Over the past three months, the board and myself have been closely monitoring our implementation of the transformational agenda and we have concluded that operating costs need to be further reduced. Unfortunately, this means the bank will have to reduce staff costs going forward,” said Saib in the notice.

“Given this, we have decided to employ an external firm to review and identify those areas where staff reductions can be made without negatively affecting the bank’s operations... The list of staff that will be impacted will be finalised in the next two weeks and communication will be made to them individually.”

Mr Saib, who joined the bank in May, added that the employees that would be affected by the move would know their fate in two weeks time, after the consultant concluded their analysis on the bank’s human resource.

First Community Bank last year reported a net loss of Sh12 million in full year to December 2015, compared to a profit of Sh50 million made in 2014. The Bank is the latest to announce that it would cut down its number of employees.

Recently, Sidian Bank said it would reduce its by 108 employees.

The bank currently has a headcount of 560 employees.

Agency banking

Sidian said it is looking at using technology more to deliver services to customers.

Family Bank in early October said it would be downsizing but did not specify the number of employees it would let go. The bank offered early voluntary retirement to employees.

While announcing its financial results for the nine months to September, Equity Bank said some 400 of its employees had left the bank over the last year and it would not be making intensive recruitment but would also be investing in technology as well as its agency banking network.

EcoBank has also announced plans to reduce the number of its physical branches in Kenya by a third. The Lome-headquartered lender was however not clear whether it would be laying off any of its employees.