Britam lays off 100 in management shake-up after CEO exit
Tavaziva Madzinga, Britam Group's incoming managing director and chief executive office.
What you need to know:
- The company expects to spend up to Sh700 million on the layoffs, which it says were not triggered by the Covid-19 pandemic.
It says employee costs account for nearly 50 per cent of its operating expenditure, a ratio that it says is higher than that of its competitors.
Britam is set to lay off more than 100 senior executives in a management shake-up following the exit of long-serving CEO, Benson Wairegi.
The regional financial services group on Monday announced a new organisational structure intended to shrink its staff numbers by between 10 and 15 percent.
Britam says it has been struggling with a bloated top executive team, despite low market penetration.
“The reorganisation is expected to lead to a leaner executive team with fewer reporting layers that will support the company’s growth in an increasingly competitive business environment. The review of the organisational structure is also expected to significantly improve service standards, reduce corporate and shared service costs, reduce unnecessary overlaps and put the customer at the centre of the business,” the insurer said in a statement.
The company expects to spend up to Sh700 million on the layoffs, which it says were not triggered by the Covid-19 pandemic.
It says employee costs account for nearly 50 per cent of its operating expenditure, a ratio that it says is higher than that of its competitors.
Voluntary Early Retirement
“The business realignment process will result in the elimination of some roles. Employees in the affected roles and positions are expected to exit the business under a Voluntary Early Retirement (VER) programme,” the insurer said.
The first batch of affected employees were declared redundant last Friday, February 26, in the process that runs to the end of May.
The layoffs come just weeks after the exit of Mr Wairegi, after serving the company for 40 years.
Mr Wairegi’s last days at the helm of Britam were marked with silent infighting until his exit in January.
In August last year, Mr Wairegi, 68, announced that he would resign in December 2020, only to stay in office until January when a source told the Business Daily that he would stay on “to offer continuity and smooth transition to the new leader who would be appointed.”
A week later, however, the insurer appointed Zimbabwean national Tavaziva Madzinga as its new head.
The current layoffs are seeking to push out senior employees who have worked at the company for years, which could include close associates of the former CEO.
Operational costs
“The business appears to be top heavy, driving operational costs even higher,” the insurer said. “This means that Britam must embrace a bold approach, required especially in today’s market context – “One Britam” Customer-Centric Operating Model.”
The group has developed a business strategy to guide its operations between 2021 and 2025.
“Over the past few years Britam has been plagued by inconsistent results performance that have heavily impacted on its perception among the investing community, thereby keeping its share price depressed. There is need to address both the inconsistent market approach and high operating costs to ensure a more credible results performance in future,” the insurer stated.
Employees who are declared redundant but fail to apply for the VER programme will be given a month’s notice, after which they will be given notice of intention to declare redundancy.
Britam, which also operates in Uganda, Tanzania, Rwanda, South Sudan, Mozambique and Malawi; said the reorganisation will mainly affect its operations in Kenya. “The entire process will entail review of roles and a Voluntary Early Retirement Programme will be implemented for roles falling off the structure,” it stated.
