Absa Bank Kenya Plc is in the process of laying off staff to reduce costs.
Coming against the backdrop of the economic slowdown caused by the Covid-19 pandemic, sources say the secretive sackings will take place in phases.
In June 2020, Absa had notified over 50 juior staff of non-performance, the bank’s policy states that an employee will be put on probation for a period of 6 months from the time of first warning about performance and if such an employee doesn’t improve, they get fired.
Most of those issued with letters of non-performance will be exiting this February 2021.
The next batch are required to leave under the Absa Early Separation Scheme. The over 100 staff, who are mostly senior and mid-level management, were notified in November 2020. They are also expected to finalize with the bank at the end of February 2021.
The last phase of the David Hardisty led layoffs targets about 100 more staff who will be declared redundant.
David is the firms retail and business banking director seconded from South Africa.
Flouting labour laws
In order to circumvent the law and save costs of paying for redundancy, the junior staff who are targeted for sacking are being blamed for non-performance.
This allows the bank to evade paying gross salary of all the years worked as per the law.
National bank also got away with such maneuvers when it was being taken over by KCB Bank.
Though the merger agreement had advised against the sacking of any staff from NBK, the bank’s management laid-off junior staff by pegging non-performance to their letters.
Things are not looking good for Absa bank. In December 2020, the bank’s net profit in the first nine months of 2020 fell by 65% to Sh1.9 billion, from Sh5.6 billion reported in the same period in 2019. Total non-performing loans rose by 30% to Sh14.3 billion at the end of September 2020, from Sh11 billion in September 2019.
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