StanChart eliminates Jobs for the Eighth Consecutive Year due to Automation

Last year, Standard Chartered Bank Kenya cut its workforce for the eighth consecutive year in response to a growing shift to digital banking, spending Sh209.96 million on layoffs.

The lender reports in its most recent annual report that in the year it recorded Sh209.96 million in redundancy costs, compared to Sh214.07 million in 2021, its workforce fell by 59 to 1,061 overall.

According to the most recent employee data, StanChart has now lost 987 jobs over the past eight years, which represents a 48 percent decrease from the company’s peak of 2,048 employees at the end of December 2014.

Lowest level in ten years

The lender laid off 160 employees in 2021, with 117 laid off in 2020 and 170 laid off in 2019.

StanChart’s net income increased from a 10-year low of Sh5.44 billion in 2020 to Sh9.04 billion in 2021 and a record Sh12.06 billion last year, prompting the retrenchments.

In the last eight years, the lender has lost Sh3.88 billion due to increased digitalisation of services and branch rationalisation.

The last time StanChart increased staff numbers were in 2014, when it went from 1,850 to 2,048. That year, the company’s net profit increased 12.7 percent to Sh10.4 billion.

Despite the decrease in headcount, staff costs increased 7.8% last year to Sh7.04 billion, partly due to salary increases and redundancy expenses. In 2020, staff costs will reach a high of Sh7.86 billion.

The committee for employee evaluation, remuneration, and board nomination at the bank reports that it “reviewed the annual increases for staff salaries and variable compensation awards” for qualified employees.

“The committee believes that it was appropriate to make these awards to those that contributed to the continued success of the company,” says the committee in the annual report.

Over the past ten years, StanChart has closed a large number of branches, claiming that going forward it will prioritize locations with high traffic in order to expand its retail clientele.

The bank had 42 locations as of 2016, but that number fell to 33 in 2019, then fell again in 2020 as StanChart closed eight locations as the Covid-19 pandemic disruptions fueled a greater shift to digital channels.

Banking online

Banking hall lines have been getting shorter, putting customer service positions like tellers in jeopardy as lenders continue to adapt to a significant shift in transaction preferences.

According to StanChart, outside branches now handle 97 percent of its transactions.

“We continue to strategically and purposefully migrate client and product acquisition, servicing, investing, and transacting through our SC Mobile and online banking channels,” said the lender.

The Covid-19 virus pandemic, which started in March 2020, hastened the decline in branch activity as customers turned to alternative methods like mobile and online banking to reduce their risk of getting sick.