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StanChart slashes jobs by half in 10 years amid automation
Standard Chartered Bank's co-shared space with Artcaffé at Britam Centre. The space, launched in December 2021, offers mobile express banking, ATMs, phone banking services and electronic cheque and cash deposit.
Standard Chartered Bank Kenya last year spent Sh580.1 million on staff redundancies, marking the latest in a decade-long trend that has seen its workforce shrink by more than half to 1,001.
The lender, which has been leaning further into digital banking, has been consistently downsizing even as its net profit and payroll costs continue to grow.
StanChart’s move contrasts the trend in the banking sector where its peers, including KCB Group, Equity Group, Co-operative Bank of Kenya, Absa Bank Kenya, I&M Group and DTB Group have been hiring more staff to open more branches or acquire other banks to support growth.
The lender says it has been on an automation drive in line with the changing customer needs, investing Sh14.1 billion in digital capabilities over the last five years and taking action to “concentrate resources where we have the most distinctive client proposition”.
“As part of our vision to build a best practice process organisation, the bank has been on a transformation journey, largely led by technology, leveraging automation and digitising our service provision,” said the lender told the Business Daily.
The Sh580.1 million spending on retrenchment, which is more than double the Sh205.63 million spent in the preceding period, came in the year the staff size dropped to 1,001 from 1,047. Over the past decade the spending on redundancies amounts to Sh4.6 billion, with Sh2.56 billion coming in the last five years.
The latest headcount means that StanChart has now shed 1,047 jobs in the past decade, resulting in a 51.1 percent drop in the workforce from the peak of 2,048 at the end of December 2014.
The retrenchments, which started in 2015 have been sustained even as StanChart’s net profit rose from a 10-year low of Sh5.44 billion in 2020 —when Covid-19 disrupted economic activities— to Sh12.06 billion in 2023 and a record Sh20.1 billion last year.
Staff costs
Despite the decline in the staff numbers, payroll costs have continued to rise, hitting Sh9.43 billion last year from Sh8.15 billion a year earlier and nearly double the Sh5.76 billion it paid in 2014 when the staff size peaked at 2,048.
The lender explains that part of the reason for the rise in staff costs has been due to salary increments and the shift towards the use of relationship managers in serving the affluent.
StanChart says its drive towards digital banking was accelerated by the pandemic, which saw many customers transact away from branches. The move, which was seen then as temporary, has become entrenched in the banking sector, emboldening lenders like StanChart to invest more in their digital capabilities.
“We are committed to investing in the areas of our business where we make the biggest difference for clients and we are constantly taking steps to realign resources to our strategy execution, focused on differentiated cross border capabilities and leading wealth management expertise for affluent clients,” said the lender.
StanChart has closed several branches over the past decade to prioritise locations with significant traffic as it seeks to grow its retail client base without losing market share in the corporate and affluent segments.
The bank had 42 branches in 2016 but the number dropped to 33 in 2019 before a further drop in 2020 when StanChart closed eight branches as Covid-19 pandemic disruptions fuelled an increased switch to digital channels.
Queues in banking halls have been declining, putting at risk customer-facing jobs such as tellers as lenders continue to respond to a significant shift in transaction preference. StanChart says 97 percent of its transactions are now outside branches.
StanChart has been encouraging workers to embrace hybrid working models. In 2024, an average of 44 percent of its staff chose the option of working from home or office for two to three days per week.
“The feedback from this group is that the flexibility supports their delivery, as well as their well-being. The bank remains committed to ensuring this work model is refreshed frequently to meet business, team, and individual needs,” said the lender.
