Hundreds of companies are resolving to lay off workers to cope with economic headwinds and instead take advantage of ballooning digital space that has so far proved to be the future of work.
Most firms like Fintechs and banks are taking advantage of this erupting digital space, leaving thousands of potential workers wondering where else they would fit when they get replaced by the internet.
For example, the State Bank of Mauritius (SBM) Kenya is set to lay off part of its employees to channel much of its operations on the digital space.
The mid-tier lender has subsequently announced a voluntary employment separation scheme (VESS) which is open to all employees and closes on October 19, 2021.
The move follows a job evaluation exercise which is backed by the bank’s board.
“The bank has reviewed its organization structure into a fit-for-purpose structure which is to be implemented in order to realize its current and future strategic objectives while optimizing its digital banking solutions,” SBM noted in a statement.
SBM is expected to embark on a redundancy program should the voluntary lay-off scheme fail to reach its desires outcome.
Nevertheless, the bank has not indicated the number of roles it seeks to cut in the exercise.
On Thursday last week, the bank announced it would be closing down three branches which will be merged to existing physical hubs.
The three branches include Lavington, Buru Buru and Kimathi.
At the same time, SBM is closing two of its express units in Limuru and on Ngong Road.
“Our customers are increasingly leveraging our digital capabilities. By optimizing the strategic placement of our physical branch network, we are ensuring appropriate resource allocation to our growing market area. At the same time, our investment in digital channels allows us to best serve customer demand, no matter the physical location,” said SBM Bank Kenya Moezz Mir.
SBM Bank, formerly Fidelity Commercial Bank Limited was among the har-hit lenders at the height of the pandemic last year when it announced cost-cutting measures by shutting down five branches, leading to loss of jobs.
It announced the targeted closure of Ngara, Dagoretti Express, Lunga Lunga Branch, Jomvu Express, and Mombasa Moi Avenue Branch.
According to a notice dated November 12, Ngara, Dagoretti Express, Lunga Lunga, and Jomvu Express branches were to close on December 12, 2020, while Mombasa Moi Avenue was to close on December 30, 2020.
SBM Bank Kenya is a subsidiary of the State Bank of Mauritius and entered into the Kenyan market through the acquisition of a majority stake in Fidelity Commercial Bank Limited.
The lender later curved out the majority of assets in Imperial Bank Limited in Receivership (IBLIR) which remains under the statutory management of the Central Bank of Kenya (CBK).
Jobless Economy
About 253,500 jobs were shed in the three months to March despite the economy showing signs of recovery from COVID-19 hardships, with employees aged below 25 and those above 40 bearing the brunt of the layoffs.
Data from the Kenya National Bureau of Statistics (KNBS) shows the number of people in employment fell to 17.84 million between January and end of March compared to 18.09 million the previous quarter.
Young people below the age of 25, mainly secondary school and college graduates, were the hardest hit by job cuts in an economic setting that is plagued by reduced hiring on the back of sluggish corporate earnings.
About 292,020 jobs held by workers below 25 years were lost in the quarter ended March as employers recovering from COVID-19 economic fallouts hired 176,325 workers between 25 and 40 years—mostly fresh university graduates.
