Anxiety heightens as banks cut salaries, sack more workers


DESPITE stern warnings by the Federal Government through the Minister of Labour and Employment, Dr. Chris Ngige that Banks in the country should put a stop to the retrenchment of workers or face sanctions, investigations have shown that some banks have started systemic retrenchment of their workforce.

One of the banks, Unity Bank sacked about 215 employees last week, citing the workers inability to cope with the bank’s new ideas and strategy. Others have resulted to cut in salaries in other cut costs.

Investigation by National Daily reveals that Banks have started slashing their workers’ salary in other to cut costs. Recall that in the first and second quarter of 2016, commercial banks sacked over 4,000 employees, and was even prepared to sack more until the Federal Ministry of Labour intervened, advising them to halt the process.

National Daily gathered that Diamond Bank slashed salary of its workers’ by 30 per cent, Heritage Bank also by 30 per cent while FirstBank and Wema Bank slashed their workers’ pay by 20 per cent.

While some of the banks have denied slashing their workers’ salary, the workers are apprehensive. “We have been receiving hints of more lay-offs due to the economic recession in the country, which has deeply affected the banking sector. Some employees lost their jobs two months ago. We also learned that another set of people will be laid off between September and October,” a staffer with one of the banks explained.

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The National Union of Banks, Insurance and Financial Institutions’ Employees, said the issue had become a serious concern to the union. Its Secretary General, Mohammad Sheick said the prevailing economic circumstances has caused serious apprehension in the banking sector.

“They (banks) have to think outside the box and objectively. If they want to cut cost or reduce certain expenditure because of certain government’s policy, then the reality is that they should know where they should direct their attention.”

Findings revealed that the affected members of staff were those that achieved less than 40 per cent of their performance target, which affected the lender’s overall profitability in recent years.

The downsizing exercise, which cut across all cadres including junior, middle and top management positions, happened at a time majority of banks are battling with poor profitability over harsh economic conditions and heightened business risks from the plunge in crude oil prices.

Lagos-based economist, Dr. Babatunde Abrahams, predicts the mass sacking of workers in banks and insurance firms going by the latest development.

He said, “If anyone has been watching economic trends for a while in the country, you will discover that the sacking of workers is inevitable. Banks trade with customers’ deposits, but I can tell you that very few people have money in banks in this harsh economic period.