Over 1 200 employees are set to lose their jobs at African Bank, as the financial institution has automated its systems.
In a statement this morning, the bank says it has commenced a consultation process with its recognised union, the South African Society of Bank Officials (Sasbo), as prescribed in terms of section 189(3) read together with section 189A of the Labour Relations Act, Act 66 of 1995.
According to African Bank, the COVID-19 outbreak and the associated protracted lockdown intensified the dire state of the economy.
“Given the financial pressure faced by our customers, the bank has recorded a reduction in sales as well as collections, which has created excess capacity across the different business units,” says African Bank.
It points out that the bank has furthermore been gradually automating processes across its operations and has implemented the omni-channel digital platform to reduce duplication and increase efficiency.
Consequently, it notes, this has led to redundancies and has required the bank to evaluate its current resource capacity which may necessitate reducing duplication of functions.
Of late, South African banks have been retrenching staff as a result of digitisation. Last year, Standard Bank announced plans to reconfigure its branch infrastructure, which resulted in 1 200 people losing their jobs.
The bank closed 104 branches; 49 in Gauteng, with a further 11 and 10 in the Western Cape and KwaZulu-Natal, respectively.
Absa Group also announced it would restructure its South African retail and business banking unit, affecting 870 jobs.
In its statement, African Bank says over the years, it has continually implemented various initiatives to reduce costs and align its operating model to the cost base, in line with the economic reality, to ensure the sustainability of the business and remain competitive.
It has, therefore, become imperative to restructure the bank and hence enter into consultations, which may lead to the loss of jobs, it notes.
Basani Maluleke, CEO of African Bank, notes: “We have been deliberate in reducing costs in all areas of our business.
“The undertaking of 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 minimise potential job terminations. During these unsettling times, we will continue to deliver the exceptional service to which our customers have become accustomed.”
According to African Bank, it is anticipated that 1 269 employees of the current 3 728 total will be affected.
The bank anticipates a job loss ratio of approximately 25% of the number affected, it notes, adding that in the preceding 12 months, African Bank has not retrenched any employees for operational requirements.
African Bank and Sasbo have agreed to a Commission for Conciliation, Mediation and Arbitration facilitation process to consult on all pertinent issues.
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