Home Economy Access Bank cuts salaries of all permanent staff as COVID-19 bites

Access Bank cuts salaries of all permanent staff as COVID-19 bites

by Business News Report

Employee of Access Bank Plc, are to take a pay cut as the coronavirus bites hard on economic activity in the country. Access which presently has a workforce of about 5,870 permanent staff after it took over rival Diamond Bank in April last year had assured staff that it would not reduce its workforce. “The pay cut will ensure that there are no job losses,” a senior official of the bank said. Several top companies in Nigeria and globally are either sacking, furloughing staff or slashing salaries to keep costs down as the coronavirus pandemic disrupts global trade and commerce.

Herbert Wigwe, the bank’s CEO in a virtual talk with staff said the adjustments are needed at this time and that he would take a pay cut of about 40 per cent. The pay cut is expected to begin with May salaries if economic conditions remain the same.

Herbert Wigwe, had held a meeting, tagged Employee Town Hall Meeting, with some staff of the bank via Microsoft’s Teams (video) and informed them of some strategic moves that the financial institution would take this month to ensure it weathered the ravaging effects of the present COVID-19 crisis ravaging the world economy. According to him, the decision would affect the bank’s 5,870 permanent staff starting with him, as his salary would be cut by 40%. Sources within the bank said that he had initially held a session with the staff, engaging them on what decisions needed to be made regarding salaries, especially considering the effects of Covid-19 on the economy. He gave staff the options of either downsizing or accepting cut salaries. Majority of the staff present at the online video meeting on Microsoft Teams chose the lesser evil of cutting salaries. After this, he had another meeting with staff via the same Teams where he finally announced that there will be salary cuts.

“One thing that has come out from the lockdown is that digital is the way forward. We do not need the complement of staff to take us to where we are going. It has also shown that non-essential staff, particularly from the outsourced staff, may not be at the level that we require to be in the future.

We do not need all the security personnel, cleaners, tellers among others that we have now, considering the fact that not all our branches would be open between now and December. We will talk to the employers of that number of staff, which represent about 75% of our staff strength, to rationalise to the level we think would make us a customer-oriented financial institution that we are.

“We are also looking at a professional cut. I understand that that is very tricky because it comes with pains. I will be the first to take the heat and I will take the largest pay cut as much as 40%. Everybody may have to make some adjustments of the sort. We understand the difficulties people are going through but also understand the higher calling of creating an institution that can continue to provide for us. When things improve tomorrow, we shall revert to normal. We understand the difficulties facing the people but we have to protect our franchise.”

Access Bank acquired rival Diamond Bank Plc last year and that 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 harmonisation” across the businesses. As at December 2019, Access Bank’s personnel cost was about N76.9 billion, up from N57.1 billion same period in 2018. The spike was mostly due to the merger with Diamond Bank where it also absorbed legacy Diamond Bank staff.

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