More job cuts

Af­ter the GMs come re­gional heads

Finweek English Edition - - Companies & Markets - BRUCE WHIT­FIELD

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

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