HF set to lay off 36 employees in cost cutting plan

Frank Ireri, Housing Finance CEO. PHOTO | FILE 

By PATRICK ALUSHULA

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Summary

• The mortgage lender reported a 58 per cent drop in profits to Sh37.1 million in the first three months of the year.
• It said Tuesday that the restructuring would result in merger, redundancy and creation of new roles for its recently launched digital banking strategy.
• The group says it has already informed the Central Bank of Kenya (CBK), Capital Markets Authority as well as the Ministry of Labour and Social Protection.

HF Group is set to lay off about 36 employees in a cost-cutting move that will see it merge some staff positions.

The mortgage lender reported a 58 per cent drop in profits to Sh37.1 million in the first three months of the year.

It said Tuesday that the restructuring would result in merger, redundancy and creation of new roles for its recently launched digital banking strategy.

The move, the bank announced, commences immediately and targets up to nine per cent of the workforce, with those affected being offered a redundancy package.

It had 403 employees at the close of December last year, indicating that the redundancy will affect about 36 employees.

In 2016, the group’s workforce was 479. The latest exit will therefore mean that staff size has shrunk by about 112 employees in less than two years.

Operational costs

Group managing director Frank Ireri said the latest layoffs will enable customer-focused decision-making, provide clarity on operational accountabilities and curb operational costs.

“By rationalising roles, we are providing the appropriate gearing towards future growth and addressing current issues such as operating costs for the business, which have remained high and hindered our ability to operate profitably,” said Mr Ireri who is set to leave HF in March next year.

The group said that it has already informed the Central Bank of Kenya (CBK), Capital Markets Authority as well as the Ministry of Labour and Social Protection.

HF joins the growing list of financial institutions that have announced staff cuts in the past two years.

Others include Kenya Commercial Bank, Barclays Bank of Kenya, Family Bank, Standard Chartered Bank, National Bank, Sidian Bank and First Community Bank.

Cytonn Investment said in its mid-April analysis that banking sector shed about 1,620 employees in 2017 as it took proactive measures to increase operational efficiency with the onset of interest rates cap.

The official figure will be revealed in the yet to be released CBK banking supervision report for 2017.