Standard Bank to cut jobs in SA but not elsewhere in Africa
After years of pushing on the accelerator, Standard Bank seems now to be going into reverse. South Africa's largest bank, which has been an acquisitive recruiter all through the financial crisis and the recession, has announced it needs to reduce operating costs and is therefore ready to cut jobs. The bulk of redundancies will be among managers and executives in the Johannesburg and London offices.
Ceo Jacko Maree chose to give the bad news himself, writing in an email to all staff that "all indications are that revenue pressure, which was evident in the first six months of 2010, will probably continue during 2011. We have no option but to carefully re-examine our cost base and the way in which we operate. We are currently analysing all operating costs across the group, including staff costs, our single biggest expense item. The review is likely to lead to retrenchments at all levels, with emphasis on managers and executives within the various head office environments, particularly Johannesburg and London."
Staff salaries account for about 60% of Standard Bank's operating costs.
There is no indication yet of how many of the bank's 50,000 staff are likely to lose their jobs. "It is far too early in the process to give any more details at the moment," says Erik Larsen, Standard Bank spokesman. "We have only just started to identify affected staff."
The announcement was unexpected - the last wave of retrenchments at Standard Bank was in 2005 - and it has sent shockwaves through the banking sector. "Standard Bank is acting a bit too hastily," says Loane Sharp, analyst at recruitment company Adcorp in Johannesburg. "It is shooting itself in the foot."
Unions have expressed a fear there could be a "snowball effect" with other big banks following suit. Absa saw its staff costs rise by 19% last year while at Nedbank they increased by 13%. The only "big four" bank to cut costs and headcount last year was FirstRand.
The news is not all bad, though: some recruitment experts say that Standard Bank is just being cautious and selective. Its decision to let some people go in London and Joburg has been taken in order to free up resources and focus on Africa, where the continent's largest bank intends to keep growing its presence.
"Africa and links to Africa are the centre of our strategy," Maree said recently. Only last month the bank poached Hasan Khan, former head of transaction banking in Africa, to work on the links between Africa and Asia. Standard is 20% owned by Industrial and Commercial Bank of China. More appointments in this vein are likely to follow.
