Companies

Absa spends Sh1bn on Covid layoffs

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Absa head office in Westlands, Nairobi. FILE PHOTO | NMG

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Summary

  • It had 1,991 employees on its payroll from 2,152 in the previous year as it moved to deepen the switch to digital channels.
  • Absa says in latest annual report that it took the opportunity of increased automation and improved digitisation to simplify the structure of the business and therefore had to cut jobs.

Absa Bank of Kenya #ticker:ABSA last year spent Sh1.06 billion to lay off staff in the coronavirus environment, closing the year with a 161 drop in headcount.

It had 1,991 employees on its payroll from 2,152 in the previous year as it moved to deepen the switch to digital channels.

Absa says in latest annual report that it took the opportunity of increased automation and improved digitisation to simplify the structure of the business and therefore had to cut jobs.

“On the back of benefits coming from years of continued investments in automation e.g. robotics, we rolled out a staff voluntary exit programme in the fourth quarter of 2020,” says Absa.

Absa in November announced voluntary exit scheme that targeted employees in both junior and senior levels.

The Nairobi Securities Exchange-listed lender, which rebranded from Barclays Bank Kenya, has now shed 1,590 jobs in the last decade. It had 3,581 employees in 2010.

Last year’s restructuring coincided with a 44 per cent fall in net profit to Sh4.16 billion—the lowest in over 14 years.

Salaries and allowances rose from Sh8.63 billion to Sh9.47 billion partly on the retrenchment cost despite the fall in employee numbers.

The lender in February said it had seen a 40 per cent fall in branch activities as people sought alternative channels such as mobile and online banking to lower risk of contracting the virus.

The bank wants to invest Sh1.6 billion on automation and roll out of 60 technology projects consisting of loan top up process— a new market move which will enable customers apply and get top ups on their existing loans – and online business banking platforms.

Absa joined Standard Chartered Bank of Kenya #ticker:SCBK which closed some branches and spent Sh1.35 billion to lay off 200 staff in the same period.

HF Group #ticker:HFCK spent Sh83 million on voluntary early retirement and other staff re-organisation expenses.

NCBA #ticker:NCBA in November also announced retrenchment on the back of branch closures saying coronavirus had affected the execution of its growth and expansion plans.

The lender, a product of CBA and NIC merger, is yet to disclose how many employees left and how much it spent on the programme.