ZB Financial Holdings has unveiled a voluntary retrenchment scheme for staff in a clear sign the contagious effects of the comatose economy are permeating into all the country’s sectors.
In a circular to staff seen by Southern Eye Business yesterday, ZB group chief executive Ron Mutandagayi said the retrenchment exercise, referred to as the voluntary disengagement scheme 2014, had been necessitated by the prevailing harsh economic climate.
Mutandagayi indicated that the exercise would open on Monday next week and close on September 15.
“In view of the high operating costs and the general low business activity, a decision has been made to offer a voluntary disengagement package to willing members of staff within ZB Financial Holdings Group,” he said.
The scheme will be offered to all categories of staff from general management, managers and non-managers.
“With a cost-to-income ratio of 108% as at December 31 2013 and growing, the business cannot sustain such level of costs going forward. The group embarked on various initiatives under the value and growth strategy to grow revenue and manage costs, but staff costs have stood out as the major threat to these efforts,”Mutandagayi added.
“Participation in this exercise is purely voluntary and no staff member may force, coerce, compel or threaten another member of staff to accept or decline the package. The offer will be open from September 1 2014 and applications will be closed on September 15 2014. The terms and conditions of the package on offer will be communicated through Group Human Resources who will be responsible for any further communication on the scheme.”
Reacting to the pending retrenchments at ZB, in which the government has a controlling stake, analysts yesterday said it was confirmation the economy was in the intensive care unit.
“These government-owned entities are the first victims of the cancer which is gradually, but surely eating away the country. Next it will be another State-owned enterprise, then civil servants not being paid and it goes on,” said Maxwell Saungweme, an economic commentator.
“The economy is in a deep crisis which cannot be resolved by the Zanu government in its current state.”
Economist John Robertson concurred.
“It is a sign of a shrinking economy. There is not much work to sustain the operations of the affected bank and hence it cannot sustain its current workforce he said. But the other problem is that retrenchments have become a handicap for companies.
There is no money to fund these voluntary retrenchment packages. One would want to find out from ZB where they are going to find the money to pay should the staff decide to take up the package.”
Most companies have of late been resorting to voluntary retrenchment exercises in desperate efforts to cut costs as well as stay afloat.
There have been reports of a number of firms failing to pay retrenchment packages or fund pension contributions by employees that had long left employment.