Banks Sacked 2,000 Staff At The Twilight Of 2019

*Brand representation of selected Deposit Money Banks (DMBs) in Nigeria

No fewer than 2,000 staff of some top banks lost their means of livelihood in December of 2019. The sacked workers who have rejoined the growing unemployment market were said to have been replaced with casual workers, usually refer to as contract staff. It is an evolving scheme, which is fast catching up among banks in Nigeria to reduce overhead cost.

The information has it that one of those who lost his job in the shake-up in the top tier bank said the management of the financial institutions chose to relieve them of their duties to cut costs and reduce the burden of payments of allowances and upfront cash to the workers, one of the perks bankers used to enjoy in the past.

Another laid off staff, said the majority of those affected are low-level officers of the bank and some within the middle-level officer’s cadre. A report by Channels Television on Monday also showed that the United Bank of Africa (UBA) conducted a review of its staff structure, which involved 5,000 of its workforce. At the end of the exercise, 1,000 of them were laid off.

Boason Omofaye, Business Morning anchor on Channels Television disclosed that the staff review is going to cost the bank about N5 billion. The report also indicated that the lender has reduced its promotional cadre to 12 levels from 16 in the course of the exercise. Analysts said many banks are restructuring their workforce to accommodate more contract staff in their quest to reduce overhead costs and do away with huge allowances due to financial industry workers and gratuities after laid off or retirements. The ongoing restructuring in the industry is attributed to the anticipated impact of the recent reduction in the tariff charges on customer transactions.

Recall that the Central Bank of Nigeria (CBN) had slashed various fee charge by banks on transactions carried out on their platform by customers in a bid to expand financial inclusion in the country, this measure insiders said would impact on the bottom line of many lenders going forward. Aside from the reduction in tariff, lenders are also confronted with a possible decline in interest-earning in the new financial year due to falling returns on government debt instruments.

The regulator also increased the Loan To Deposit Ratio (LDR) of banks to 65 per cent and gave December deadline for compliance, these developments have put some lenders under pressure to reduce operational cost to be able to stay afloat. The resultant impact of the regulatory directives was the mass staff laid off that swept across some top lenders, including the UBA in 2019.

Related posts