ZB Financial Holdings will cut its workforce by 25% as part of a restructuring plan in the financial services group to cut costs and ensure profitability, CEO Ron Mtandagayi says.
In e-mailed responses to businessdigest’s queries, Mtandagayi said his group was looking at laying off around 300 employees from a total staff complement of 1200.
“We have taken a decision to restructure our business with the aim of improving on cost efficiencies and business performance as a whole. As you may recall, we have already taken the decision to dispose of non-performing entities (ZB Asset Management and ZB Securities).
With any business reorganisation comes restructuring of all units and inevitably reduction in staff numbers. This has led to staff been given an opportunity to participate in a Voluntary Disengagement Scheme,” he said.
“The Voluntary disengagement process is currently underway and we hope to have it completed by 31 October 2014. We are looking at an organisation with the capacity to carry 900 staff and at present we have staff of 1 200, a net reduction of 300.”
Mtandagayi would not be drawn into disclosing how much ZB Holdings will spend on the retrenchment exercise, saying this depended largely on how many people would accept the disengagement offer.
“We have made all the relevant labour consultations and the packages will be in line with these recommendations. As you can appreciate the final amount spent will be determined by the number and levels of staff who would have taken the packages. The necessary provisions have been made to facilitate this process,” he said.
Mtandagayi said the layoff was meant to align the business’ outturn and profitability with the current staff resources.
He said this would help the group save on unnecessary costs in the current depressed economic envionment.
“In line with international trends, ZB is also becoming a technology-driven organisation, a development which has seen us needing to cut down on staff numbers as technology takes over some of our critical functions,” Mtandagayi said.
He said the group’s cost reduction exercises were not limited to staff rationalisation alone, adding management was looking at rationalising accommodation, using technology to increase efficiencies, and going paperless in most of its operations.
“With all these interventions we aim to achieve a cost to income ratio of 50% by 2016,” Mtandagayi said.
ZB’s total income was US$20,5 million from US$22 million in the same period last year, reflecting an 8% decline.
Profit after tax fell to US$529 057 from US$1,3 million recorded in June last year, showing a plunge of 139%.
Total deposits stood at US$234 million as at June from US$211 last year. ZB Financial Holdings Limited was incorporated in Zimbabwe in May 1989, as a holding company for a group of companies, which have been providing commercial and merchant banking and other financial services since 1951.
ZB Financial Holdings is one of the most diversified financial services counter on the Zimbabwe Stock Exchange with interest in asset management, banking, life assurance,reinsurance, securities and transfer secretaries.