Insurance group Britam Holdings #ticker:BRIT has eliminated nine top executive positions or nearly half of its management team as the new CEO shakes up the top deck of the Nairobi bourse-listed firm.
The company Thursday introduced a leaner team of 11 managers from the previous 19, with the majority of the nine executives expected to exit at the end of the month.
Positions that have been scrapped include the principal executive director, chief of staff, group chief operating officer, corporate affairs director, commercial director, and actuary and product development manager.
Britam’s asset management unit, which was headed by a director, will now be under corporate business and headed by a chief investments officer.
The chief executive roles for the insurer’s life, general and micro insurance businesses have been eliminated and the managers redeployed.
Britam’s executive team shake-up is one of the most significant in recent years after the largest one undertaken by KCB Group that led to the scrapping of some 15 executive directors’ posts.
“Under the new leaner structure, the company’s executive team will comprise eleven Directors after dropping 9 positions,” Britam said in a statement.
“Britam has retained six key executives, with new mandates, from the previous executive team, appointed one new executive member on promotion whilst announcing a new appointee, who was externally sourced. The company is also currently in the process filling the vacant roles.”
The three slots include strategy and investor relations, customer experience as well as legal and compliance director.
The latest reorganisation is being implemented under the leadership of the new chief executive Tavaziva Madzinga, appointed on February 1, to replace Benson Wairegi, who had been with the company for four decades.
Those who occupied the nine scrapped slots include Gladys Karuri, Edward Kuria, Jack Maina, Muthoga Ngera, Kenneth Kaniu and Betty Mwangi.
Among the executives retained are former CEO for life assurance Ambrose Dabani, who is now head of retail. Former acting chief general insurance Jackson Theuri will be director corporate while Saurabh Sharma who headed the micro-insurance division is now director emerging consumers business.
James Maitho (group human resources), Carol Misiko (risk and compliance) and Kennedy Aosa (international business) have retained their roles.
Eva Kimani has been promoted to director partnerships and digital while Charles Kimani has been hired from outside as the new finance director.
Elimination of some executive roles is part of a plan to shed an estimated 138 jobs by end of May at a cost of up to Sh700 million, with a consultant hired by the company saying there are too many managers and reporting layers.
“The business appears to be top-heavy, driving operational costs even higher,” the insurer said in a recent statement.
This is the second wave of layoffs at the insurer which spent Sh664 million to let go of 110 employees in 2018.
Britam said the new job cuts have been necessitated by the company’s financial and share price underperformance relative to its peers, adding that its current staff costs remain bloated.
The insurer added that remuneration accounts for half of its operating costs.
The company said it could cut 10 to 15 percent of its total workforce which stood at 923 in December 2019, according to the latest available disclosures.
This places the estimated job cuts at 138.
Most of the layoffs will be in the Kenyan operation – its biggest and which employed 624 people or 67.6 percent of the total staff count at the end of 2019.
Britam said employees whose roles have been affected by the restructuring are eligible to apply for the voluntary early retirement.
The exit package includes compensation for accrued leave days, the balance of medical cover for 2021 and notice pay as per individual contracts.
The company also said it would make ex-gratia payments above the statutory minimum of 15 days for each year of service, subject to board approval.
The company spent a total of Sh3.9 billion in staff costs in the year ended December 2019, eating up 10.7 percent of the total income of Sh36.4 billion in the period.
In the half year ended June 2020, Britam slid into a net loss of Sh1.63 billion from a net profit of Sh1.67 billion a year earlier.
Mr Madzinga, a Zimbabwean national who previously served as the chief executive of Old Mutual’s Kenyan business, has been tasked with boosting returns for Britam’s shareholders.