Banks shed jobs to ease cost pressures

LIVINGSTONE MARUFU

 

At least 149 workers have been laid off in the banking industry as a result of lenders’ cost-cutting spree and to  better position themselves  for an uncertain economic environment, the Zimbabwe Banks and Allied Workers Union (ZIBAWU) has said.

The job carnage was confirmed by ZIBAWU secretary general, Peter Mutasa, who told Business Times this week that local banks have been laying off workers due to skyrocketing costs and increased automation, which has resulted in branch closures.

In addition, Mutasa said lenders were cutting jobs in an effort to streamline operations in a difficult operating environment.

There are now growing fears, according to Mutasa, that more jobs could be eliminated this year.

“In the banking sector, we had close to 150 workers who lost their jobs with ZB having retrenched 94 employees with 67 on voluntary and 27 on compulsory basis and First Capital Bank has laid off 55 employees in 2023,” Mutasa said.

Mutasa stated that while the reasons for employee layoffs varied among banks, they all appeared to have adapted to the current state of the economy and advancements in technology in order to reduce expenses.

“Some banks cited that their total income was increasing at a slower pace than its costs, after stripping off technical credits such as revaluation gains and foreign exchange revaluation credits.

“This therefore poses a serious challenge to the future sustainability of the banks’ business,” Mutasa said, while referring to some letters that banks wrote to ZIBAWU members confirming the laying off.

Additionally, a large portion of the banks’ overall expenses are reportedly attributable to the high staff costs.

The job haemorrhage may be related to exchange shocks brought on by the depreciation of the Zimbabwean dollar.

 

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