ABSA is under pressure from trade unions to confirm that its business reorganisation will not result in job losses, which some insiders have estimated could be as high as 3000.
The Barclays-owned group denied it was planning mass retrenchments on the scale of those carried out more than a year ago by Standard Bank , but trade unions Solidarity and Sasbo said their members were concerned about job losses. Absa has 35000 permanent staff in SA.
Insiders said there was evidence of the growing influence of Barclays over strategic issues such as cost containment and risk management. Absa insisted that the reorganisation could not be compared to retrenchment.
The only big bank to confirm retrenchments was Standard, which laid off nearly 2000 staff in SA and the UK to cut costs. First National Bank and Nedbank have used mainly staff attrition to contain personnel numbers.
Absa insiders said that even though the bank’s overall costs grew by just 6% in the year to December, to R25,5bn (2010: R24bn), there was concern that staff expenses rose by 9% to R13,64bn and accounted for 54% of total expenses.
Absa has blamed higher staff expenses mainly on salary increases and bonus payments.
Banking analyst Johan Scholtz of Afrifocus Securities said yesterday that staff expenses were the single largest variable cost facing the big banks, even though these differed from bank to bank because of different models and total staff numbers.
He estimated that Absa’s average wage costs per staff member, including bonuses, were about R379000, Nedbank’s R354000 and FirstRand ’s more than R420000 because of higher bonuses paid by its investment banking unit. He could not give Standard Bank’s average costs.
Professional services company PwC warned this week that banks had to continue trimming expenses to avoid hurting efforts to sustain growth and improve return on equity.
Solidarity deputy secretary-general Dirk Hermann said the union wanted Absa CEO Maria Ramos to "publicly" confirm that there would be no retrenchments, while Sasbo met executives to discuss the issue yesterday.
"Absa has told us they are asking people to reapply for their posts because they want to match skills to the right job and areas where they are needed most. But we will fight any retrenchment because they have not mentioned the word retrenchment," said Sasbo assistant general secretary Comfort Duma.
Sasbo is embroiled in a wage dispute with Absa and the two parties will meet today after agreeing during arbitration to go back to the negotiating table.
Mr Hermann said Solidarity wrote to Ms Ramos after receiving a "vague" response from Absa’s human resources department. "We will be very glad if the information we are getting from our members about planned retrenchment is not true."
Absa would not confirm that Barclays wants it to cut staff expenses by up to 10%, as claimed by sources at the group, but it said: "Since 2009, Absa has consistently indicated that the bank was endeavouring to improve efficiencies and effectiveness, while reducing duplication.
"Where the reorganisation of particular business units is necessary, we aim to minimise the impact on our people through effective processes to find suitable placement for these employees. In exceptional cases, this may not be possible," the group said.
