Banks, companies reduce workers' salaries due to recession

Banks, companies reduce workers' salaries due to recession

- Most money deposit banks and insurance firms have slashed their workers’ salaries by between 20 and 50 per cent

- This is due to the economic recession Nigeria is currently going through

- This development has been confirmed by management sources and workers in some of the organisations

A report by The Punch indicates that Diamond Bank Plc, Heritage Bank Plc, Zenith Bank Plc, First Bank Plc and Wema Bank Plc have all reduced their workers’ salaries as of August 31.

Banks, companies reduce workers' salaries due to recession
Nigerian banks are one of the hardest hit in the recession ravaging the country

While Diamond Bank and Heritage Bank were said to have slashed salaries by 30 per cent, First Bank and Wema Bank reportedly slashed workers’ salaries were by 20 per cent each.

The banks' decision were made in order to meet deposit targets, which have become high in recent time. Hence, workers who failed to meet their targets had their salaries slashed.

The report also revealed that the same decision has been taken in some insurance companies.

Before now, the marketing departments of the underwriting firms and insurance agents were responsible for generating premium for the companies, but it has been extended to all employees.

Sources quoted said insurance workers in the marketing department who failed to meet their premium targets also had their salaries slashed.

“Before, it was only the marketers that they used to give targets to. Now, some of us also have targets ranging between N40, 000 and N100, 000 monthly and our promotion and salaries are tied to our performance,” an insurance worker squealed.

A worker in one of the new generation banks also said she resumed work after her annual vacation only to discover that she didn’t get the same salary that she had always received.

“There is perpetual fear in all banks. Every category of workers in the banks is affected by the economic crisis,” another bank employee noted.

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He also revealed that some bank workers had been resigning and travelling abroad, especially the United States and Canada, to avoid being sacked.

“One of my colleagues just resigned last month because of the fear of losing his job and travelled to the U.S to seek greener pastures.

“But those who are not interested in leaving Nigeria have devised many means to survive the harsh economy should their letters of sacking come anytime. They are setting up small scale businesses.

“The most common ones are laundry services and restaurants which require capital outlay of N500, 000.

“The academically-sound ones among them have been moving to private universities to take appointments there.

“The problem is on the high side now.  There is perpetual fear among bank workers that they can be fired at anytime,” he said.

The National Union of Banks, Insurance and Financial Institutions’ Employees (NUBIFIE) also confirmed the development in the banks.

NUBIFIE Secretary General, Mohammad Sheick, said the issue had become a serious concern to the union.

His words: “There is apprehension in the banking sector. Recently, there was mass sacking by banks and the Federal Government directed that those who were sacked during that period should be recalled.

“We have had about two meetings with the Federal Ministry of Labour on the issue and we are hopefully looking at the possibility of the ministry calling us to another meeting so that we can have an understanding on how to respond to the emerging issues like economic recession and other factors that are affecting the operations of banks.

“Even before the economic recession, the banks have always responded to any policy of the government negatively. The first thing that came to the mind of the banks’ management, which the union has always disagreed with, is to lay off workers.

“They (banks) have to think outside the box and objectively. If they want to cut cost or reduce certain expenditure because of certain government’s policy, then the reality is that they should know where they should direct their attention.

“I can volunteer to say that the thing that eats deep into banks profit and loss is nothing other than the kind of lifestyle of the management staff of the banks. For example, the monthly salary of one executive director is more than the salaries of 100 workers. This is apart from other privileges and perks attached to him as an executive director.”

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Figures released by the National Bureau of Statistics (NBS) on Wednesday, August 31, showed that Nigeria had officially gone into recession.

The NBS figures showed that in the Gross Domestic Product (GDP) for the second quarter of 2016, Nigeria’s economy contracted by 2.06 percent.

The country’s economy shrank by 0.36 percent to hit its lowest point in 25 years. The second quarter report makes Nigeria’s economy the worst in three decades.

Meanwhile, the manufacturing sector is getting bleaker by the day as their earnings dim amidst the biting economic crunch.

Recently, four major blue-chip Nigerian companies lost as much as N51.86 billion in the first half of 2016 as the economy continues to take a dip.

Nestlé Nigeria Plc, Nigerian Breweries Plc, Dangote Cement Plc and Lafarge Africa all suffered combined profit losses to the tune of N51.86 billion in the first half of the year.

In a related development, renowned economist and businessman, Mr Atedo Peterside has predicted that the recession currently experienced in Nigeria will last for a long time.

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Peterside who is also the President & Founder of Anap Foundation said business confidence is low and investors are holding back on investing in Nigeria.


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