Cost pressure forces Standard to cut jobs

Cost pressure forces Standard to cut jobs

2010-10-05 17:32

Johannesburg - Standard Bank Group [JSE:SBK], South Africa's largest bank by market value, has announced to staff that a fresh round of retrenchments will most likely hit managers based in its London and Johannesburg offices.

A confidential email was circulated on Tuesday afternoon signed by group CEO Jacko Maree and Sim Tshabalala, head of Standard Bank South Africa.

The email, which cited cost pressures for the staff reductions, was confirmed by Standard Bank spokesperson Ross Linstrom.

In its interim results to end-June Standard Bank said its earnings rose 11% to R5.9bn during the period under review on the back of improved market confidence and better returns from wealth management business Liberty Holdings [JSE:LBH]. The group also managed to nearly halve its impairment charge from R7bn in the first half of 2009 to R4bn.
The dividend was maintained at 141c.

At the release of the results in August, CEO Jacko Maree said Standard Bank wants to become a link between international capital markets and Africa, focusing specifically on the oil, gas, telecommunications, power, infrastructure and mining industries as well as the financial sector.

"If you want to play in this game you need a strong dollar balance sheet - not just a strong rand one," said Maree.

  • BB - 2010-10-05 18:10

    And this is while the Jaco Marees of this world get paid millions in bonuses. I suppose it's one way of saying "Merry Christmas" to your staff. Loyalty only works one way at Standard Bank. Used to work for this crowd, but luckily there is life after Standard Bank.

  • KHB - 2010-10-05 18:11

    I got that email today. Our department has far too many directors earning millions each. They are the ones who should be fired. They don't actually do any work, they just talk a lot and get fat salaries. Those of us who actually do the work should be left alone.

  • WTF - 2010-10-05 18:21

    Well, last year they had $1.5 billion on their balance sheet, how much stronger do they want it?

  • Adams - 2010-10-05 18:23

    If this is the case then I expect to see a substantial decrease in Directors fees please. Lets see if they have good governance, which includes a social repsponsibility! Cut your multi million rand salary Maree and save a few jobs! I dare you.

  • Reinardt Bronkhorst - 2010-10-05 18:26

    So if I get this right...things are looking good and Standard Bank, so they are going to fire some people to up their profits, not save the business?

  • Roland - 2010-10-05 18:36

    Guess those appointed to the "board" that are "political appointments" will not be part of this cut! Get rid of those "hangers-on" and you would make plenty of profit!

  • James Minnet - 2010-10-05 18:41

    Earning rose 11% but there's "cost pressure" ? Scum bags. Or did this order come from the Chinese overlords who want more profit ? Thats probably the case. Your jobs are going to China my China

  • I wonder - 2010-10-05 18:53

    I wonder if this will affect white managers only or be accross the board. Somehow I think the latter.

  • Croft, Raymon - 2010-10-05 19:03

    SBSA is ranked no. 1 among South Africa's commercial banks but to retrench more managers in JHB. & lONDON is a tragedy and seems to confirm the declining role of the branch manager aka Captain Mainwaring of Dad's Army.Banking will never be the same again as the branch network is stripped of power and influence.

  • Kick - 2010-10-05 20:12

    What is "amazing" is the email did not state that executives would freeze their bonuses for the next few years until Std Bank returns to a growth position. One executive's bonus could probably pay for 20 peoples salaries. But NO we would not expect Jaco and his ilk to forgo their multi million rand mansions and fleet of cars so that lesser folk can support their families. The disparity between executives pay and your average worker is reaching ludicrous proportions and their greed and open lust for money is disgraceful. Come Jacko I challenge you to freeze increases for executive salaries and pay no bonuses amidst cutting staff and bread winners. I know for a fact you wont...

  • Judith - 2010-10-05 20:22

    So the bank which constantly overcharges customers despite the Jali Commission, closes branches with impunity leaving customers in the dwange, continues its reckless, mega profit driven moves and now is retrenching hard workers so that the board can crema it! I highly recommend that every Standard Bank "customer" move to another bank. With this event, I shall definitely be cllosing my accounts and moving elsewhere. Their board members are greedy and they do not care about growing the SA economy onyl about their pockets. As a life form they are worse than government.

  • InsLib - 2010-10-05 20:35

    To Jacko and Sim....get rid of your Liberty execs who are running the company into the ground through inexperience and incompetance; you will save PLENTY!!?

  • Pops - 2010-10-05 20:41

    Know you know it is in the public domain...

  • Joe - 2010-10-05 20:50

    This after they went on a recruitment drive? There is more to this...

  • Janice - 2010-10-05 22:03

    As a bank employee, I left early today and was shocked to read the news, I am so depressed. It's definitely not what I want to hear at this time of the year.Shame on you, Std Bank!

  • gpwengineer - 2010-10-05 22:06

    No wonder unions strike. Headline earnings rose to R5 billion and they still need to retrench staff. Sounds like the board trying to get more dividends for its shareholders next year around at the cost of people's jobs. Its sad this free market system

  • Pd - 2010-10-05 22:26

    The banks spends millions on bonuses, most of this is highly confidental and never disclosed, i wonder why, maybe people didnt derseve it. Cut down on bonuses to the already super rich, close the leadership centre, millions is spent there every year teaching people how to be leaders, is it working, nobody really knows, all I know is that it's a big party with free drinks!

  • Michael S - 2010-10-05 23:43

    Arghh...corporates!! On the one hand, they tell their staff that they have to cut costs to keep head above water, but come the next annual Shareholder glossy, they announce how well their Earnings per share increased for the year and/or the usual rosy profit ratios that soared, etc etc. Finally then, their Chartered Acountants report (to SARS) reflecting muted profits because STD were taking strain under "difficult trading conditions" for the past year....

  • Global - 2010-10-05 23:57

    It is ironic when u have filled the upper level of management with foreign executives (with exorbitant packages) from failed foreign banks with scant disregard for the transformation objectives, under the guise of globalization! Now the bank wants to retrench a workforce that has helped build this bank! Stop using your contract workforce (at exorbitant rates) to hide the blatant disregard for this country's economic and political transformation. Use the LIFO (Last In First Out) policy for retrenchment to reduce the expensive cost base created in this caustic environment.

  • Notbee - 2010-10-06 06:29

    An the FAT CATS are getting pay cuts too?? Bloody thieves, no regard for their employees and their families. They only aim to please the shareholders...

  • Mac - 2010-10-06 06:29

    Lets not forget how a large no of companies carried out bad AA practices, thereafter requiring a whitey to do the job and a black person to help with the "ratings"!!!!

  • LEIGH - 2010-10-06 07:30

    Can accept that business is bad and STd may have to retrench but they should then start with the Executive. Banks are always top heavy with Executives who are often overpaid and who always underperform (they have retired to management). THey should also have a serious look at the structiure where they have two people performing one job and get rid of the underperformer !!!

  • LT - 2010-10-06 07:35

    At the end of the day,, the big shots make the decisions and if the bank is in financial trouble the decision makers should get the axe. Yeah the board and sharholders are greedy SOB's just liek the directors who have a fleet of Porche's and fancy home. Nice Xma's some poor staff will have. Greedy bastards.

  • LT - 2010-10-06 07:36

    I think all staff should strike and cripple the bank and its greedy leadership.

  • Pieter - 2010-10-06 07:40

    Bull, they are the bank with the highest fees. How much profit did they make last year? More than R50 million, how can you retrench people if you still make huge profits.

  • @ ALL OF YOU WHINERS - 2010-10-06 07:49

    You clearly don't understand business. If i pay you R 10000 per month and you only "bring in" R 8000 you are making a loss, so get lost. If you can afford another domestic worker would you just hire one for the sake of a slightly cleaner house? NO. And that's the same way Std Bank or any decent business should operate. Get rid of the non-performing workers, that's life become more skilled/productive or get fired.

  • Chrisj - 2010-10-06 08:00

    So glad I saw the writing on the wall years ago when there were the "golden handcuffs". Get out while you can and make a better career doesnt take much. They program staff that u have security...kyk who lyk ons now". The only people who make money working for a bank are right at the top.

  • Mindlos - 2010-10-06 08:03

    Greedy !!!Greedy !!! and Greedy at the expence of the poor. The rich getting rich and the poor getting even poor due to such things.

  • mark - 2010-10-06 08:29

    Why is everyone complaining about people getting retrenched, the article states that the MANAGERS will be getting the boot. Whats so bad about that, they are the ones getting ridiculous salaries. And a business should be run to please shareholders.

  • Al - 2010-10-06 08:38

    So, Standard Bank charges the highest fees and yet wants to retrench some of its workforce. Sounds like it isn't managed at all well.

  • Mr Drew - 2010-10-06 08:40

    Tough times call for tough measures. I feel sorry for the affected employees. Horrible experience to go through but you will emerge stronger. You may even be able to contract back to Std Bank at a vastly higher pay.

  • DG - 2010-10-06 09:29

    This is exactly the way they opperate. They go on a recruitment campaign and emploey people with no experience in high Profile jobs, whilst behind the scenes this is what is actually happening, surely this did not happen overnight.

  • being left behind! - 2010-10-06 09:46

    ''Standard Bank Group [JSE:SBK] will provide $100m to farmers in four African countries in the next three years to help boost agricultural production and economic growth, CEO for Africa Clive Tasker said on Friday.'' Standard Bank provides funding such as the above so that all these politicians from neighbouring countries can have highly paid bodyguards, drive fancy cars, send their kids to fancy schools and universities overseas and rob their own people of living decent lives. If the bank can give money to other countries, why cant they take care of their own staff first in our country.

  • JKP - 2010-10-06 10:02

    Totally typical directors are the one's should be fired earing fat salaries houses in Sandton and on the coast and luxury vechicles don't do the work but take the credit sit on their fat arse's and get fatter

  • JOTD - 2010-10-06 10:21

    I am one of the managers that have been notified about the retrenchments at STD bank, have 2 kids and earn less than all my contract staff.....great, thanks for all the support from you guys in this forum...

  • Jacquess - 2010-10-06 10:43

    There are only 2 decent human beings in SBK top management: Ben and Sim. The rest are those typical cold and cowardly type of people who live selfish lives and worship money and status. Uninspiring people I wouldn't ever got to war with.

  • ep - 2010-10-06 10:44

    Again... The branch staff are sick and tired of this. One minute restructure the branches then retrench. The freezing of posts never worked! Silly management by the bank.

  • tax consultant - 2010-10-06 10:55

    @JOTD (Sorry to hear re your's always bad). Maybe you should go also the "contacting" route? A few of my tax-clients work for STD head office on (IT) contracts, and have another retired client, who STD asked to work for them for another 2 yrs on post-retirement contract. But STD wants to retrench permanent psoitions and yet hire specialised contract-staff...(probably a very small %). The skills shortage is probably why. If you got a specialised skill to offer them....go contracting!

  • Leon Coetzee - 2010-10-06 11:15

    does anyone have the amiling address of Jacko Maree to which i cold forward the comments above ... or could anyone please do it on my behalf ... i thik he should read it for a little 'street' perspective ...

  • RM - 2010-10-06 11:19

    I think that if a few directors are dismissed, at least 50 people can stay in their jobs. Why so many directors, in a bank that has infrastructure and strategy. Every other day a new director is been appointed. This is not acceptable. Also the excellence awards trip can be cancelled and the money refunded to the bank, same as all other festivities has been cancelled

  • Judith Lesley Fenton - 2010-10-06 11:27

    I left the bank years ago with a golden handshake. Am still bitter. I worked where I saw what the big nobs get. Its a disgrace! all that wallowing round in money money money. The greed and contempt they have for the staff is disgusting. I will be on mental pills for the rest of my life because of it. The place stinks!

  • jovis - 2010-10-06 12:17

    People i have always admired standard bank and still do but i am totalli against the retrenchment especially in this manner. Ihave applied for a leadership programme and recentli received an invite for an interiview. i was so excited till ive learnt of this news.

  • 666 - 2010-10-06 12:57

    I know of IT directors who spend millions on failed projects but nothing happens to them. Hard working staff however always seem to face the axe when the balance sheet reflects the high costs.

  • HB - 2010-10-06 13:59

    I am concerned as to people being retrenched or laid off. I don't care whether it's managers, Executives or staff it's people who will be going home and might not get jobs elsewhere as unemployment is extremely high in this country. I agree why don't the top people give up their increases / bonuses so that other people will be able to at least keep their jobs. Mr Maree take this into thought of people who can loose all they have and maybe come up with another solution to the problem.

  • MM - 2010-10-06 20:34

    Well I see STD are targeting Execs and Senior Managers, managers dont earn the same as execs and still do the work, what about all the outsourcing to India cut that before cutting perminent staff and let all the contractors go they earn more than double some staff

  • MoM - 2010-10-07 07:26

    Share bonus for 2007: 03 Apr 2007 Maree, Jacko H Buy 200 000 4 065 R8 130 000.00 Directly Beneficial 17 Apr 2007 Maree, Jacko H Sell 200 000 11 117 R22 234 000.00 Directly Beneficial

  • BS - 2010-10-11 14:31

    Sad to think that some people might lose their houses because they cannot pay their bonds,will not be able to pay school fees or put food on the table that the true reality of retrenchment

  • ggg - 2010-10-14 06:58

    They keep on bringing in more and more contractors from India, while local people have to lose their jobs!!!! Makes sense????

  • ggg - 2010-10-14 07:08

    Or how about not paying dividends next year. That could save a couple of billion. But that would upset the shareholders, and they're more important than people's jobs!!

  • gogga - 2010-10-17 13:27

    and then they say Hay we Care. All they care for is earning megabucks while the staff on the ground have to double up due to freeze on positions. They don't care how we make our targets irrespective of being short staffed. "They" want profits because if they don't get them, the possibility of them losing credibility is "embarrassing". I have been touched by the restructuring and we were told that posts should be filled quickly by the 1st October. Now been told that this has been put on hold due to the retrenchments, although the processes are two different processes, they run concurrently........They forget that we now stress ourselves about possibly not having a job. Staff get differing versions and they forget that the grapevine climbs quickly and although they say we must not listen to the grapevine gossip, there is always some truth in it!

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