Access Bank not sacking 75% workforce

As against the trending news in the social media that Access Bank plc has concluded plans to sack 75 per cent of its work force, Business247News Online can authoritatively say the bank is not thinking along that line.

A top management staff of the bank who is in the know of the development explained to our correspondent on Friday that the bank Managing Director and Chief Executive Officer, Mr Herbert Wigwe, never said the bank would sack 75 per cent of its work force in his discussions with the staff members.

He said the bank CEO engaged staff members on how it intends to handle the reality forced on it by the coronavirus pandemic that has impacted negatively on the fortune of the bank, like many other companies the world over.

The source told our correspondent that the bank CEO explained to them that all staff members would be affected in some degree of reduction in wages with him taking the highest pay cut of 40 per cent.

“He never said that 75 per cent of the workforce would be disengaged. What he said was that the number of contract staff would be reduced by 75 per cent and not that it was planning to sack 75 per cent of its whole work force”.

According to the source, many of the bank branches would not be operational for now and “when a branch is not in operation, how would you justify keeping such staff as security guard and all sort?”, he asked.

The reductions are expected to start from May unless business conditions improve, said the people, who were briefed on the matter during a conference call and asked not to be identified because they’re not authorized to speak publicly. Some management will get as much as a 40 per cent decrease, they said.

Access Bank, which acquired Diamond Bank Plc last year, had 6,898 permanent staff at the end of 2019, going by the figure on its website. The acquisition partly contributed to a 31 per cent increase in operating expenses. Personnel, recruitment and training costs account for more than a third of overheads after the deal boosted employee numbers and resulted in “wage harmonization” across the businesses. This we gathered contribute to the challenge faced by the bank.

It is a public knowledge that Access Bank, like many banks, outsources most of its non-bank functions (such as security, cleaners, etc.). Those people are not employed directly by the bank itself, but rather by third-party subcontractors.

It is these services that Access Bank intends to rationalize, which would end up presumably disengaging about 75 per cent of such contracted persons. A small percentage of actual Access Bank core staff will be disengaged especially in several areas of duplication post-merger with Diamond Bank that might be trimmed during this crisis.

Findings by our correspondent from some outsourcing companies revealed that Access Bank is not the only bank which has taken the route of disengaging some of its outsourced staff members.

This medium gathered that not less than four banks have done same with their outsourced staff members. The CEO of one of such outsourcing companies explained that for the fact that a bank/company does not need the services of the outsourced staff that does not mean the outsourcing company would automatically lay off such a worker.

“No, we don’t do that. We don’t lay them off because their services are no more needed where we posted them. We retain most of them and find another place for them unless the person is not competent”.  He explained.