StanChart scales down in Zimbabwe

 StanChart scales down in Zimbabwe
Published: 03 May 2019
STANDARD Chartered has retrenched more than 100 employees with more lay-offs planned as the bank has begun outsourcing some of its operations in Zimbabwe to countries such as Kenya, Malaysia, China and India, it has been revealed.

StanChart, one of the oldest banks operating in Zimbabwe, closed one of its branches in Harare last month as part of the new strategic thrust that insiders said was likely to cost more local jobs.

Insiders said the restructuring had caused anxiety among employees who fear losing their jobs.

According to a memorandum to workers written by StanChart's head of human resources Audrey Mlambo, which is in our possession, the bank will soon retrench
another 20 workers.

The reasons given for the retrenchments was the migration of the bank's operations to its Global Business Services (GBS) centres in Chennai and Bangalore (India), Kuala Lumpur (Malaysia) and Tianjin (China).

"Standard Chartered Bank (SCB) runs the majority of its businesses and operations supporting various countries in Asia, Middle East, Africa, Europe and Americas out of its Global Business Services centres in Chennai/Bangalore, Kuala Lumpur and Tianjin," reads part of the memo.

"These world-class operation hubs enable the bank to run its business and operations with great efficiency and leading-edge controls and service management while maintaining robust business continuity with maximum flexibility with respect to scale.

"As part of continuing review of our strategy and in a bid to improve effectiveness and efficiencies of our business operations, SCB has concluded that the best option is to migrate the country operations from Zimbabwe to GBS centres in India, Malaysia and China."

A source said another Stanchart branch in Harare's Borrowdale suburb could soon close down.
Stanchart chief executive Ralph Watungwa told Standardbusiness that the bank was evaluating its channels of delivery because branch transaction traffic in Zimbabwe was on the decline.

"As we continue to evaluate our strategy in line with the external environment and client needs, at times this may lead to job losses, but our aim is to redeploy impacted staff wherever possible," he said.

"Hubbing select operations enables Standard Chartered, and many other multi-national companies, to streamline internal business processes and efficiencies, and, most importantly, deliver an enhanced and consistent level of service to our retail, commercial and institutional clients."

However, some bank employees said they did not understand why StanChart was "exporting jobs" when the operations could be run cheaper locally.

"What is disturbing is that the bank is willing to pay forex as management fees yet they retrenched the person who was doing the very same job that has been exported to Kenya, India and Dubai," said one of the employees, who requested anonymity.

"In short, the bank is exporting labour yet the mantra is that Zimbabwe is open for business."

Zimbabwe Banks and Allied Workers' Union secretary-general Shepherd Ngandu said they were also worried about StanChart's retrenchments.

"What has been strange about the recent retrenchments of 2017 and 2018 is what they are giving as the reasons for the retrenchments as technology," he said.

"Certain operations that can be done here in Zimbabwe are being moved to other countries."

Meanwhile, CABS is offering its employees voluntary retrenchment packages amid indications that up to 20 workers have taken up the offer so far.

In an email to workers dated April 1, CABS said the move was meant to cut staff costs, which are US$21 million a year.

Another email dated April 1 by Old Mutual Zimbabwe chief executive officer Jonas Mushosho said the group was seeking to "rationalise staff costs". CABS is owned by the Zimbabwe Stock Exchange- listed financial services giant.

"Recent developments in the economy, which include the currency devaluation and increasing inflation, are putting pressure on business performance, which is witnessing increases in business costs that are not accompanied by similar increases in revenue. As a result the business needs to act to reduce costs," read Mushosho's email.

"There will be various measures that we will implement to manage costs, and one of the measures will be to rationalise staff costs."

Staff costs for the Old Mutual Zimbabwe for the year ended December 31, 2019 declined to US$91 364 867 from a 2017 comparative of US$93 823 387.

CABS managing director Simon Hammond did not respond to calls.

Zimbabwe's economy is struggling despite the promise of a quick turnaround by President Emmerson Mnangagwa's government.
- the standard
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