Fam­ily Bank re­sorts to lay­offs to re­duce high staff costs

The lender has al­ready called for a vol­un­tary early re­tire­ment through a memo cir­cu­lated to staff on Fri­day, Septem­ber 30

The Star (Kenya) - - Front Page - BY RICHARD MUNGAI @Richiy­mungai

Fam­ily Bank is plan­ning to lay­off an un­spec­i­fied num­ber of em­ploy­ees in the next two weeks, with an aim of cut­ting high staff costs which have kept op­er­at­ing ex­penses above Sh6 bil­lion since 2015.

The lender has al­ready called for a vol­un­tary early re­tire­ment through a memo cir­cu­lated to staff on Septem­ber 30.

“As part of the bank’s on­go­ing trans­for­ma­tion strat­egy that en­tails assess­ment of our over­all struc­ture and re­sources with a fo­cus on de­ploy­ing cap­i­tal ef­fi­ciently to im­prove over­all per­for­mance, the bank is of­fer­ing a vol­un­tary early re­tire­ment pro­gramme to el­i­gi­ble em­ploy­ees as of Oc­to­ber 1, 2016,” noted the memo seen by the Star.

Fam­ily Bank’s fi­nan­cial state­ments in­di­cate op­er­at­ing ex­penses in­creased by 20 per cent from Sh5.34 bil­lion in 2014 to Sh6.41 bil­lion in 2015. That in­crease was largely caused by a 14.49 per cent jump in staff costs from Sh2.30 bil­lion to Sh2.64 bil­lion.

In the half year to June 2016, op­er­at­ing ex­penses stood at Sh3.81 bil­lion com­pared to Sh2.91 bil­lion in June 2015.

The lay­off will be the sec­ond purge in less than a year. The bank fired nine se­nior staff in De­cem­ber 2015 over the Sh791 mil­lion fraud at the Na­tional Youth Ser­vice.

The of­fer to el­i­gi­ble em­ploy­ees in­cludes a golden hand­shake of one month pay for each com­plete year of ser­vice and a no­tice pay in ac­cor­dance with the terms of em­ploy­ment con­tract.

Ac­cord­ing to the lender, em­ploy­ees will also be able to ac­cess their pen­sion dues, while out­stand­ing staff loans shall be set­tled at the rates ap­pli­ca­ble un­der its HR pol­icy.

“Em­ploy­ees who are el­i­gi­ble will have 14 days from the day of this memo to ap­ply. The of­fer shall close on 14 Oc­to­ber,” the lender said adding: “the bank will re­view ap­pli­ca­tions and com­mu­ni­cate the fi­nal de­ci­sion.’’

/ FILE

Fam­ily Bank branch in Nyahu­ruru

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.