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Staff layoff costs Britam Sh664 million

Benson Wairegi
Britam Group managing director Benson Wairegi. FILE PHOTO | NMG 

Britam Holdings #ticker:BRIT spent Sh664 million to lay off 110 staff members last year, joining the list of companies that turned to voluntary early retirement schemes to cut on costs.

The Nairobi Securities Exchange-listed insurer had in March last year announced layoffs saying this would enable it remain agile, relevant and responsive to changes in market conditions.

“In 2018, we undertook a restructuring exercise that saw 110 members of staff exit the group,” Britam discloses in its latest annual report.

“Staff were offered a voluntary early retirement package, which included the payment of all contractual dues and an ex gratia payment, which was well above industry practice.”

Staff size at the year-end was 901 compared with 932 the previous year, indicating that the company also hired new workers even as it implemented the early retirement plan.

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Britam joins Standard Chartered Bank #ticker:SCBK and Barclays Bank of Kenya #ticker:BBK who have also disclosed that they spent Sh611 million and Sh479 million respectively on early retirement scheme, dimming the job outlook for listed firms.

The one-off cost at Britam saw its operating expenses rise 12 per cent to Sh8.24 billion, putting pressure on its bottom-line. It closed the year with a Sh2.2 billion net loss, which is its worst performance in over a decade.

The firm attributes the loss to the restructuring, adverse movements in the value of listed equities, lower returns on property investments and new accounting standards.

Britam, which bought a 48.2 percent stake in Housing Finance #ticker:HFCK, lost nearly Sh4 billion in paper wealth last year after the mortgage lender’s share sunk to a 15-year low on poor financial performance.

Total staff costs bulged by 23.5 per cent to Sh3.65 billion during the period under review.

Britam says it tries to strike the balance between paying fair wages and attracting and retaining best talent. “There is pressure, as with any listed company, to control employee expenses and increase profits and returns for shareholders.”

During the year, CEO Benson Wairegi’s pay also jumped 8.6 per cent to Sh81.6 million as that of executive director Stephen Wandera rose from Sh40.4 million to Sh40.9 million.

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