Following the outbreak of Covid-19 and the increasingly dire state of the economy, African Bank, which had been on the road to recovery, has announced that it expects to cut a significant number of jobs.
Read: African Bank well on its way to recovery (Nov 2019)
It said on Tuesday afternoon that it is anticipated that 1 269 employees of the current total of 3 728 will be affected. The bank anticipates a job loss ratio of approximately 25% of the number affected.
“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.”
The bank has also been gradually automating processes across its operations and has implemented the Omni-channel digital platform to reduce duplication and increase efficiency.
It says this has led to redundancies, forcing it to “evaluate its current resource capacity, which may necessitate reducing duplication of functions.”
Read: Sarb moves to sell stake in African Bank (Feb 2020)
‘Last resort’ to reduce costs
“We have been deliberate in reducing costs in all areas of our business. The undertaking of a consultation process with our employees is the last resort to further reduce costs,” said African Bank CEO Basani Maluleke.
“Our intention throughout the process will be to consider appropriate measures to avoid and minimise potential job terminations.”
African Bank said it has continually implemented various initiatives to reduce costs and align its operating model to the cost base, in line with the economic reality, to ensure the sustainability of the business and remain competitive.
“It has therefore become imperative to restructure the bank and hence enter into consultations, which may lead to the loss of jobs,” it said.
African Bank and finance union Sasbo have agreed to a Commission for Conciliation, Mediation and Arbitration (CCMA) facilitation process.