Big four bank Absa has sent out letters of retrenchment to staff in its consultants and actuaries unit, despite continually denying that it was embarking on a widespread retrenchment process.
This has sparked fears that IT staff, who were sent on a three-month reassignment period last month, could end up unemployed as soon as the middle of May.
The retrenchment letter, a copy of which is in ITWeb's possession, indicates that some consultants and actuaries unit employees' reassignment period had come to an end and that they would be without a job from the end of the month.
In addition, a further round of job cuts could be looming, as Absa has sent more IT staff a letter notifying them that it is realigning positions within the group with available skills, as it seeks to trim IT staff from 1 200 to 700, alleges a union.
Absa has repeatedly denied that this is tantamount to retrenchment, but claimed instead that employees trimmed from the IT unit would be deployed in other positions across the group.
Out of luck
In this latest letter, sent last Monday, Absa informs staff within its business analysis unit, which forms part of the bank's greater IT functions, that it is creating a business-aligned and integrated technology team to unlock “potential and growth” across Africa.
The letter, supplied to trade union Solidarity by an employee, says “your specific position within the team has been affected”. The employee, who does not wish to be named, has been asked to complete a preference form and indicate a “preferred” position within the new structure.
Last week's missive, to an unknown number of staff in its business analysis unit, follows a February exercise in which 1 600 employees were told to reapply for positions in the company. Those who were not successful, almost 200 staff, were escorted off the premises carrying the contents of their desks in boxes.
The almost 200 staff members who were placed on gardening leave, were told they would be able to search for new jobs within the group while on reassignment. However, many were concerned that they would be without a job once the reassignment period ended.
The big four bank, which turned over R45.8 billion and reported net profit of R9.7 billion in the year to December, has denied that staff will be retrenched. Finance union Sasbo, which represents about 20 000 Absa staff, has threatened war if the bank cuts jobs.
Phased process
Solidarity deputy general secretary Dirk Hermann says about 500 IT staff are expected to be trimmed from the bank's contractor and employee base when it has finished the realignment process.
Hermann says a source has told the union that Absa's IT professionals will be trimmed from 1 200 to 700 as it outsources some staff, contracts come to an end and it goes through a retrenchment process.
Last week's letter was sent to business analysis staff, while the first round affected core IT employees, says Hermann. He says staff affected by February's realignment process will be retrenched on 13 May, if they are not successful in being redeployed.
“Our information is that Absa was instructed by Barclays to cut personnel expenses by 10%,” says Hermann. “It is clear that Absa's strategy is to restructure business units one by one.”
Employees are first informed that there is no room for their posts in the new structure, after which they are given a chance to apply for their own posts, and then sent on reassignment before being retrenched, says Hermann. He says the problem is that there are fewer positions than employees.
ITWeb sent Absa copies of the letters issued by the union, as well as its statement, requesting comment. However, the bank failed to respond at the time of publication.
Share