More job cuts
After the GMs come regional heads
BANKING GROUP ABSA is likely to shed another 400 jobs as it redefines its corporate structure. Market rumours had put the expected number far higher, but Absa Retail Banking CEO Louis von Zeuner last week moved to temper concerns of large-scale cutbacks. Absa employs more than 33 000 people in its retail banking division and around 45 000 throughout the group.
It comes as part of a second phase of rationalisations among management layers of the group. Earlier this year Absa said it was looking to cut about 100 general management positions at its head office. It ended up removing just more than 60 posts.
Now Von Zeuner says the group is looking at its regional offices in an effort to become more efficient and ensure quicker decision-making with fewer layers of management. He assured staff an effort would be made to utilise managers in other parts of the bank as it looks to cut back in areas such as cheque processing, where volumes have declined in recent years. “We might not be able to place about 400 staff,” Von Zeuner says. Despite concerns of global financial sector contagion, a slowing international economy, stubbornly high domestic interest rates and uncertain Government policy amid the departure of a number of Cabinet ministers, including President Thabo Mbeki, Von Zeuner remains upbeat on local prospects. He’s expecting SA’s environment to improve into 2009 and is cautious about cutting back on staff numbers now ahead of what could be a turnaround in local financial sector fortunes next year.
SA’s financial sector has been largely sheltered from the sub-prime credit fallout. In the US 102 000 jobs have been cut in financial services since August, according to US workforce specialists Challenger Gray & Christmas. The collapse of Lehman Brothers and the merger of Merrill Lynch with Bank of America are the primary reasons behind those losses, while the announcement that Goldman Sachs and Morgan Stanley are becoming bank holding companies could see them cutting costs and jobs.
Some industry estimates suggest nearly 10% of the 2m jobs in the US’s financial sector are likely to be cut. Citigroup has laid off almost 20 000 staff – the most recent high profile scalp being that of Sallie Krawcheck, head of Global Wealth Management.
Might not be able to place 400 staff members. Louis von Zeuner