Absa Bank reduced the total number of Absa Group employees by 1 200 in the first nine months of this year, as a result of the economic ramifications of the COVID-19 crisis, combined with its digital strategy implementation.
In its latest trading update, the big four bank says the COVID-19 pandemic has had a devastating impact on the global economy and has resulted in significant changes to government actions, economic and market drivers, as well as consumer behavior. This has, in turn, had a significant impact on the bank’s performance.
The economic upheaval caused by the COVID-19 crisis, combined with the group’s digital transformation strategy, resulted in the bank reducing its headcount to 38 472 in 2020 – down from 41 703 in 2017.
Absa Group, which operates in 14 countries across the globe, has been intensifying its digital roadmap, with a key pillar in its strategy premised on developing scalable solutions and services that meet the evolving needs of customers.
An Absa spokesperson said, while the total reduced headcount includes permanent and temporary employees across all 14 regions of operation, the bank has not instituted group-wide retrenchments.
“Much of the reduction stems from natural attrition as Absa instituted a hiring freeze – we did not fill positions that became vacant earlier, as part of our response to the business impact of COVID-19. Employee numbers are also impacted by the continuing global and local progression towards digital banking, which has been a trend over many years,” says the spokesperson.
In its retail banking report for SA, Absa says headline earnings dropped 91% to R415 million, due to 259% higher credit impairments as pre-provision profit increased by 10%. The bank’s revenue was flat at R24 276 million, as net interest income grew 6% and non-interest income decreased by 7%.
Absa says while it is not planning to close any branches in SA as part of its digital strategy, in other Absa regional operations business units (operations outside of SA) “customer needs are constantly changing and Absa has been investing in physical and digital distribution channels to offer more convenience”.