[ad_1]
African Bank says the Section 189A inquiries will affect 1,269 of its 3,728 employees. Photo: provided by African Bank
African Bank, one of South Africa’s new banking competitors, has joined a long list of companies that have to lay off their staff due to Covid-19.
African Bank announced on Tuesday that it has started consultations on downsizing with the banking sector union Sasbo. The bank anticipated that Section 189A inquiries will affect 1,269 of its 3,728 employees.
The bank said it anticipates a job loss rate of about 25% of those affected, which means that ultimately around 317 people or 8% of its staff members may be out of work by the end of these queries.
“The Covid-19 outbreak and associated prolonged lockdown intensified the dire state of the economy. Given the financial pressure our clients face, the bank has seen a reduction in sales and collections, creating excess capacity. in the different business units, “the bank wrote in a statement Tuesday afternoon.
The bank had just entered the transaction banking space in 2019, trying to diversify its income streams beyond the investments and loans it was traditionally known for.
But the state of its loan portfolio took away the prominence of the new company in this year’s interim results when the bank announced that it had already experienced a 25% reduction in debt collection.
But on Tuesday, African Bank said that the automation of its business processes also played a role in considering layoffs. The gradual automation of certain tasks and the increased use of digital media by customers had led to staff layoffs. In 2019, African Bank CEO Basani Maluleke said the bank was training an army of 29 data analysts who would join the bank earlier this year and help it accelerate its digital banking game.
But African Bank was still adamant that there will always be a space to cultivate physical branches, having opened a new branch in Sandton City at the time.
However, on Tuesday, African Bank said that the impact of Covid-19 and the layoffs created by digitization have made it imperative to restructure its operations and therefore initiate consultations that may lead to job losses.
“We have been deliberate in reducing costs in all areas of our business. Conducting a consultation process with our employees is the last resort to further reduce costs. Our intention throughout the process will be to consider appropriate measures to avoid and minimize potential employment terminations, “Maluleke said in the statement.
He added that the bank’s services to clients will not be affected by the layoffs.
