Harare - Standard Chartered has defended its decision to outsource processing and other services in markets such as Zimbabwe to hubs in India and Kenya, saying it will help the lender to remain financially stable in the face of criticism from bank workers over job losses arising from the streamlining of operations.
Standard Chartered is one of about five foreign banks that operate in Zimbabwe.
The others are Standard Bank-owned Stanbic, Nedbank-controlled MBCA, as well as Barclays and Ecobank.
The British-owned Standard Chartered is facing pressure from unions in Zimbabwe, which are protesting its decision to lay off workers and to streamline operations by outsourcing some services and processes to centres in Kenya.
They say this is disadvantageous to the Zimbabwean economy and is costing jobs in a market that is already in crisis.
“We are gravely concerned that the unmitigated and arbitrary migration of processes to other countries will make most of the remaining jobs redundant. This will wipe away the remaining jobs through further retrenchments,” Farai Katsande, the president of the Zimbabwe Bank and Allied Workers Union said in a petition presented to the British Embassy in Harare.
Migrated
The bank workers’ union said Standard Chartered “has been retrenching and closing various departments”, noting that “operations that used to employ a lot” of people including account processing, cash management, loan processing, procurement, card services and bank reconciliations had been migrated to hubs in other countries.
However, Standard Chartered defended the move, saying it “aims to be lean and financially strong”, and was “building momentum towards a better balanced business with growth in higher-returning retail and wealth segments”.
“Regrettably the realignment of our strategy has meant some staff losses in markets across our business in Africa, Asia and the Middle East.
“As always, we retain the strictest level of compliance with local regulations and endeavour to reallocate roles as far as possible to minimise any negative impact,” Lillian Hapanyengwi, the spokeswoman for Standard Chartered, said.
Streamline
She added that the outsourcing strategy had been in place for a long time and highlighted that “hubbing select operations enables Standard Chartered, and many other multinational companies, to streamline internal business processes and efficiencies, and most importantly, deliver an enhanced and consistent level of service to our retail, commercial and institutional” clients.
Standard Chartered has committed to its operations in Zimbabwe, even in light of mounting pressure on foreign firms for them to speedily give away majority shares to black people. The banking industry has faced turbulence in the past few years, including bank closures, and Finance Minister Patrick Chinamasa is expecting enhanced stability in the sector on improved regulatory oversight and tight policies.
Standard Chartered retrenched 69 workers last year and is currently in the process of laying off a further 37 employees. Another round of retrenchments has already been lined up for later this year, according to the bank workers’ union.
“The need to retrench has been necessitated by the drive to achieve efficiencies in deployment of human capital and associated costs. Management has implemented a number of initiatives in the past 12 months in an effort to bring the revenues up and reduce operating costs,” Standard Chartered Zimbabwe said in a recent notice to employees.
BUSINESS REPORT