First Capital Bank of Zimbabwe is set to retrench at least 200 employees, while Central Africa Building Society (CABS) will in October close four branches nationwide.
The Zimbabwe Banks and Allied Workers Union (Zibawu), revealed the two banks claim their actions were in response to the harsh operating environment and the impact of digital banking on the sector.
First Capital head of corporate affairs and customer service, Emily Nemapare, confirmed that some employees were compulsorily going to leave the bank, but could not disclose the figure.
“First Capital Bank Zimbabwe can confirm that some employees will be exiting the bank under a compulsory restructuring exercise. This has come on the back of a review of the operating model aimed at creating operational efficiencies. The exercise also seeks to respond to local and global trends impacting the banking industry,” she said.
Zibawu, however, insisted the bank was throwing 200 workers into the streets as several banks are downsizing operations resulting in closure of branches.
First Capital action comes CABS this week announced an imminent to close some of its branches across the country.
In a notice to stakeholders, CABS managing director Simon Hammond, said four branches — Harare (Mt Pleasant), Bulawayo (Kulumane) Mutare (Dangamvura and CA House) will be shut down by the end of October.
Commenting on CABS Zibawu general secretary Shepherd Ngandu said: “We checked on the authenticity of the information doing the rounds on social media and we got confirmation that it’s true.
“As for the reasons, we were advised that the bank has sufficient branch network to service those same clients and also that the business thereof from the said branches has gone down to levels not meeting their strategic thresholds.”
Retrenchment of workers is on the increase as most banks are downsizing operations in the face of growing digitisation and a difficult operating environment.
“We continue to witness reduction in head counts across the entire financial service sector with First Capital Bank of Zimbabwe intending to lay off nearly 200 workers,” said Ngandu.
“It remains a source of worry when members loose employment through retrenchment particularly in this economic environment when the retrenchment pay-outs are meagre and fast loosing value.
“The situation is made worse by retrenchment laws which are unfavourable to employees particularly with regard to the prescriptive statutory minimum retrenchment package of one month salary for every two years served,” added Ngandu.
“The down side is that when in the view of affected workers, that the employer has capacity to pay more, there are no sufficient legal mechanisms to allow negotiations in good faith so that employees receive a fair package upon retrenchment.
“We have witnessed of late employees who have been retrenched at that statutory package reduced to paupers immediately after retrenchment. Such minimum retrenchment package could work well in a stable environment as opposed to the current situation in which incomes have lost value by about ten times.”
Some banks such as Standard Chartered Bank have already closed several branches nationwide.