Family Bank has started handing its employees redundant letters, pointing out to mass retrenchment mostly attributable to Covid-19 effects to the economy.
In a letter addressed to targeted staffers on May 15, the lender announced that most jobs had been declared redundant due to change of operating environment leading to automation.
The bank promised to redeploy those affected in the changes or retrench them in case there was no vacancy for redeployment.
“The Bank has decided to undertake a restructuring exercise guided by a review of its operational model ad the need to drive efficiency. Changes have taken place in the operating environment leading to automation of processes to support the global trends and demand for digital products and services,” said the bank’s head of human resources Elijah Kariuki.
Kariuki said the bank was centralising key processes, focusing on automation and digitization to reduce dependence on manual processes. The bank is also reviewing the organizational structure to reduce hierarchical levels, a span of control and ensure optimal staffing levels in view of automation of processes and the move towards digitization.
“As a result of the above measures and the ensuing reorganization your current job has been declared redundant and thereby this serves as notice of 30 days within which the bank will endeavour to redeploy you in available positions that suit your skills and experience in other sections of the bank, within the next thirty days. You are encouraged to look out for any roles of your interest that may be advertised through internal job adverts,” added Kariuki.
Three days later, the bank has started handing redundancy letters to affected employees, who will now be paid a one month’s salary in lieu.
“We write to advise that the bank has decided to end the contract on 18th May 2020,” read the letters from Mr Kariuki.
The bank joins a number of other institutions that have reduced their workforce during the Covid-19 pandemic period.
Family Bank registered a net profit of Ksh949.8 million for the year ended December 31, 2019. This was a growth of 288 per cent in net profit from the Ksh244.2 million recorded in 2018.
The bank attributed the growth to rise in customer deposits, loans advanced to the SME market and income from non-interest sources such as fees and commissions.