Old Mutual to cut jobs
OLD Mutual Zimbabwe Limited is this month implementing a voluntary retrenchment programme that will see the financial services group reduce its workforce by 10 percent.
This comes as the company is restructuring its business in line with the obtaining operating environment and to maximise cost efficiencies. The process started this month and is expected to be complete by end of the month. Consultations with employees has already begun for the retrenchment scheme that is open to all employees irrespective of their level within the group.
“We are looking at an overall target of 10 percent of the staff force to apply for the voluntary retrenchment package. The process officially kicked off on 1 April 2019 and is expected to conclude by end of April 2019,” said group chief executive Jonas Mushosho by email, responding to questions.
“As a group we are also witnessing an increase in business costs particularly for goods and services that have an import content. As a result, the business has embarked on cost efficiency measures one of them to resize the platform with a voluntary retrenchment package offered.
“Employees who want to be considered for the scheme are encouraged to apply and all applications will be subject to approval. Packages will be fair and we are taking into consideration a number of benefits over and above what is required by labour laws,” said Mr Mushosho.
The financial services group has also made investments into technology in the past years resulting in automation of some of its processes and creating the need to re-assess staffing levels.
Like most businesses operating in the country, Old Mutual has been affected by the challenging operating environment characterised mainly by foreign currency shortages that have negatively affected the economy. The unavailability of the US dollar has made the processing of payments to foreign suppliers and creditors difficult for business. In line with guidance from the Reserve Bank of Zimbabwe (RBZ), banks and other financial intermediaries, including Old Mutual Zimbabwe did not maintain separate customer accounts for USD, bond notes and coins, and payments made electronically whose values were considered to be at par.
Although the RTGS FCA and Nostro FCA accounts were previously pegged at 1:1, local financial institutions struggled to meet foreign payment requests unless an entity directly deposited hard US dollars prior to a financial institution facilitating payment, received export proceeds or received foreign currency allocation for imports.
Meanwhile, Old Mutual Zimbabwe’s revenue for the year to December 31, 2018 grew by 41 percent in revenue to $1,4 billion on an increase in all main revenue lines.
Resultantly, pre-tax profit for the year under review jumped 36 percent to $329,8 million while operating profit rose 23 percent to $79,2 million on the back of profit growth in the life, banking and asset management business.
Gross premium written was 10 percent firmer to $214 million for life and short term insurance business on improved client retention and new business that was underwritten.