Breaking News

Retrenchment Tsunami: Banks sack over 1,000 in two weeks

Labour threatens showdown with banks

By Babajide Komolafe  & Victor Ahiuma-Young
The banking industry is experiencing an unprecedented wave of staff retrenchment with over 1,000 bank workers losing their jobs within two weeks. The leadership of organised labour in the banking industry has, however, called on the Central Bank of Nigeria (CBN) to call the banks to order otherwise it will be forced to take on the banks.


Vanguard investigations revealed that on Friday, October 23, one of the four leading banks sacked 485 of its staff. Sources close to the bank confirmed that the bank sacked about 11 staff in its Matori branch (in Lagos).   It was also gathered that the management of the bank had indicated another retrenchment exercise will be conducted in December.

Also, about a week to that day , two other banks, one with subsidiaries in 19 African countries and the other the product of merger between a leading investment bank and a leading African bank had sacked 700 staff. While the former sacked 400 staff, the latter sacked

Investigation reveal that the criteria used in determining retrenched staff including appraisal report, non-performing loans and length of service.

Investigation reveals that more banks are gearing up to lay off a significant number of their staff. One of the big old generation banks whose chief executive was sacked by the Central Bank of Nigeria in August has commenced moves to lay off staff that have spent up to 33 years in its employment.

The bank had already asked such staff to put in their retirement letters. Meanwhile, the bank sacked nothing less than 100 staff in the last month for sundry reasons. A source in the bank told vanguard that the bank would have to lay off a chunk of its staff otherwise it won’t make progress. “Most of the staff here so used to the old inefficient ways of doing things here hence they have to go” The same bank it was gathered is set to prune down it contract staff and investigation reveals that nothing less than 300 might be affected.

Also at the time of writing this report, one of the top new generation banks whose chief executive was sacked in August indicated that it would sack staff that failed to meet their deposit target by Friday last week. Industry sources however told Vanguard that the deposit target is a cover up and that the new management just want to reduce the work force to cut down on expenses. The bank is said to be one of the highest paying in the industry and the new management is finding it difficult to sustain the huge monthly wage bill given the precarious situation of the bank.

In fact, Vanguard investigations reveal that the wave of retrenchment is driving by cost consideration. Faced with the challenge of dwindling profitability and earnings, the management of most banks  are devising means of reducing cost especially staff cost hence the decision to retrench staff. Investigations however reveal that as the banks are sacking regular staff they are replacing them with contract staff. The banks it was gathered employ companies which supply them with such contract staff. The staff are not the staff of the banks but the staff of the companies that recruited them.

The companies pay them while the banks pay the companies. In most cases such recruiting companies are owned by a top official of the bank or an associate of a significant shareholder.

Investigations reveal that the practices have  become so prevalent that most banking operations’ staff of one of the top three banks are contract staff. It was gathered that what these contract staff are paid is more than 50 per cent lower than what a regular staff doing the same job is paid. In addition to reduced wage, the banks are also freed from the burden of gratuity and other emolument they pay to regular staff.

*Labour threatens take on banks over retrenchments
Meanwhile organised  labour in the nation’s banking industry has kicked against the new wave of retrenchments of workers in the nation’s banking sector and called on the Central Bank of Nigeria (CBN), to call the banks to order to avoid a disruption of the fragile peace in the industry.

Under the of the Association of Senior Staff of Banks, Insurance and other Financial Institutions (ASSBIFI), warned against the increasing unilateral and illegal retrenchments of workers by the new generation banks without recourse to international best practice and the nation’s labour laws, threatening that organised labour would be forced to take on the banks make business difficult for them.

Acting President of ASSBIFI, Comrade Sunday Salako, told Finance Vanguard that labour was surprised that the CBN and other agencies of government could keep mute while hapless Nigerians were being thrown into the saturated labour market.

He lamented that a particular bank (name withheld) that has its head office on marina, after frustrating and killing the unionism in the bank, has developed penchant for retrenching workers almost twice a year, the latest being over 400 staff.

According to him: “ We condemned the manner these banks especially the new general banks are throwing workers into the job market.  We call on the CBN to call these banks to order or we will be forced to descend on them and business difficult for them. First, they have refused to allow their workers to join unions despite the constitutional guarantee to right of freedom of association. Secondly, they go ahead to retrench these workers that they did not allow to join union unilaterally and without severance benefits. Take IBTC Chattered for example, we have tried to unionise the workers on their invitation, the management has continued to rebuff and frustrate the efforts.

Continuing, he however praised the First bank for carrying the organised labour along its recent retrenchment exercise and said the retrenched workers were happy with the severance benefits and other exit packages.

Comrade Salako said: “ Before, Afribank used to have the best severance benefits. But First Bank has beaten it to it. I can tell you that First Bank is truly the first in this regards.

The management negotiated with labour and followed down rules and regulations on redundancies and the end, we agreed on a good package that the retrenched workers and everybody was very happy about. We will want other banks to emulate the First Bank and do things right. The banking sector is a very sensitive sector and presently, it is enjoying a fragile peace, we might be forced to disrupt the peace if this unilateral action of retrenching workers is not stooped.”


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.