Kenya: Rise in digital economy contributing to job losses especially in banking sector

The recent past has seen a number of companies including banks declaring a significant number of their staff members redundant as they increasingly embrace digital technology in a bid to reduce staff costs 

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Article
19 August 2019

Kenya Commercial Bank worker count falls as bank embraces digital technology

Author: Patrick Alushula, Business Daily (Kenya)

"KCB worker count falls by 240 as more cuts loom"

KCB Group’s employee headcount fell by 240 in the six months to June 2019, another low in seven years, with CEO Joshua Oigara saying the trend was inevitable given banks’ increased investment in digital outlets. The group had 5,980 employees at the close of June 2019 compared to the 6,220 it closed 2018 with, marking a sustained drop in its headcount amid the lender’s growing profitability. From a staff size of 5,162 in 2012, the number of employees grew to a peak of 7,509 in 2015 before starting to shrink. “For efficiency, we will see less and less jobs in the industry. In reality, as we build much more investments in our digital channels and agencies, we will see fewer jobs in our establishments,” Mr Oigara told the Business Daily in an interview...

While one employee was serving 1,227 customers in 2016, the same employee is now serving more than 1,544 customers as a result of increased efficiency from technology. The Central Bank of Kenya (CBK) has previously hinted that the industry was likely to continue experiencing changes in staffing as lenders adopt innovations such as financial technology, blockchain and artificial intelligence.

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Article
13 August 2019

Rise in digital economy contributing to job losses

Author: Fredrick Obura, Standard Digital (Kenya)

"Tough time as Kenyan companies plan mass job cuts"

The wave of lay-offs has hit Kenyan companies once again with more than four firms spelling intentions of getting rid of hundreds of workers before the end of the year...Some analysts attribute the layoff wave to the high cost of labour and production as well as mass adoption of technology. “The cost of labour in this country is very high and that means that if companies cannot rejig their businesses to be more efficient they are going to go down, to avoid going down, the first place to look at basically is how to reduce the labour cost,” says Patrick Obath, Kenya Private Sector Alliance trustee.

...“A lot of companies are also going digital and buying various innovations most of which are now being developed locally; the innovations carry a lot of efficiencies leading to redundancies in some jobs,” he says. He added that the technology wave means many people are going to lose their jobs and forced to rethink their careers and at times, it will call for retraining to fit into the digital economy that Kenya is fast-moving to. Stanbic bank plans to part ways with around 255 employees in a voluntary retirement package plan. “The voluntary early retirement is an outcome of a clear strategy, where we are looking at how to become in the business that we run. But also as digitise, and become more digital it means some functions will have to be re-organised as a result,” said Stanbic Bank Kenya Chief Executive Charles Mudiwa.

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