Lenders wipe out nearly 500 jobs

LIVINGSTONE MARUFU AND CLOUDINE MATOLA

Zimbabwe’s banking sector is reeling from a wave of mass retrenchments, with nearly 500 employees losing their jobs in the past 12 months as financial institutions implement drastic cost-cutting measures.

The mass layoffs come amid a volatile and uncertain economic environment, forcing banks to restructure operations to remain viable.

Zimbabwe Banks and Allied Workers Union (ZIBAWU) Assistant Secretary-General Shepherd Ngandu cautioned that more job losses are likely as banks continue to streamline their workforce.

“Since 2024, Zimbabwe’s banking sector has retrenched 453 workers, with CBZ Bank driving most job cuts (347), followed by First Capital Bank (52), ZB Bank (33), and Steward Bank (21). These job losses stem from technological advancements such as automation, artificial intelligence, and digital banking. Additionally, strategic restructuring to reduce costs and align with global trends,” Ngandu said.

He emphasised the importance of retraining and reassigning employees rather than resorting to layoffs.

“To mitigate losses, banks should prioritise retraining and reassigning staff instead of hiring short-term contractors. Retaining employees preserves institutional knowledge, reduces recruitment expenses and fosters loyalty. A focus on upskilling , paired with partnerships for affordable training, offers a sustainable path to balance efficiency with social responsibility and consumer trust,” Ngandu said.

The retrenchments come amid broader economic turmoil, with businesses across various sectors downsizing in response to Zimbabwe’s deteriorating macroeconomic conditions. The country’s persistent economic crisis—characterised by rising inflation, currency instability, and declining consumer spending—has forced financial institutions to make difficult operational decisions.

CBZ Holdings Limited (CBZHL), a leading financial services group, has been at the forefront of the job carnage, with 347 employees laid off in the past three months as part of a sweeping restructuring initiative.

The group’s CEO, Lawrence Nyazema, defended the move, stating that the restructuring was necessary to enhance operational efficiency, strengthen the bank’s market position, and ensure long-term sustainability.

“In October 2024, CBZHL initiated a restructuring exercise across all business units to adapt to Zimbabwe’s volatile economic landscape. As of January 31, 2025, we have concluded this process, impacting a total of 347 staff roles out of our 1,448-strong workforce,” Nyazema said in a statement.

He expressed gratitude to the affected employees for their contributions and assured them of the bank’s commitment to supporting them during the transition.

“We remain dedicated to providing necessary resources to assist those affected in securing future opportunities,” he said.

The restructuring also saw CBZHL laying off 13 senior executives as the company pursued a leaner operational model to navigate the country’s economic headwinds.

Beyond Zimbabwe’s challenging economic climate, automation and technological advancements have significantly reshaped the banking landscape.

As financial institutions embrace digital banking, mobile applications, and artificial intelligence-driven solutions, the need for a large workforce has diminished.

Banks have been investing heavily in digital transformation to cut costs, improve efficiency, and meet changing consumer preferences.

However, this shift has come at a heavy price for employees, many of whom have been rendered redundant.

A banking industry expert, who requested anonymity, said automation was an inevitable reality for Zimbabwean banks. “The traditional banking model is evolving rapidly. Automation allows banks to process transactions faster and with fewer errors, which ultimately reduces operational costs. Unfortunately, this also means fewer jobs in customer service, branch operations, and administrative roles,” he said.

The banking sector’s woes mirror the broader economic downturn gripping Zimbabwe.

Rising inflation, liquidity shortages, and weakening consumer purchasing power have placed immense pressure on businesses, leading to widespread job losses across multiple industries.

Several major supermarket chains, including TM Pick n Pay, OK Zimbabwe, N. Richards and Spar, have been forced to scale down operations or shut down branches due to declining revenues and skyrocketing operational costs. The retail sector, once a major employer in Zimbabwe, has been one of the hardest hit, with thousands of workers losing their jobs.

Economic analysts attribute the country’s struggles to chronic inflation, which has significantly eroded wages and disposable incomes.

“The cost of living has surged dramatically, while wages have remained stagnant or declined in real terms. Consumers are spending less, which affects businesses’ bottom lines. In turn, companies are forced to downsize or close altogether,” said economist Dr Prosper Chitambara.

The instability of Zimbabwe’s local currency, the Zimbabwe Gold (ZiG), has further compounded the crisis. Despite the central bank’s efforts to back the currency with gold reserves and implement stringent monetary policies, the ZiG continues to lose value against major foreign currencies.

“The reintroduction of the ZiG was rushed, and businesses have struggled to adapt. A lack of confidence in the currency has fueled inflationary pressures and worsened economic uncertainty,” said financial analyst John Mutizwa.

With the local currency’s depreciation, banks have had to navigate foreign exchange shortages and declining loan repayment rates, making it difficult to sustain their workforce.

Many financial institutions have responded by tightening lending policies, further restricting access to credit for businesses and consumers.

As Zimbabwe’s economic crisis shows no signs of abating, industry experts predict that further retrenchments in the banking sector are inevitable. The combination of automation, currency instability, and declining profitability means that financial institutions will continue to restructure their operations.

“There is no escaping the reality that banks will have to cut more jobs to stay afloat. Unless we see a significant turnaround in economic conditions, more employees will be at risk,” a Harare-based bank executive, who preferred anonymity, told Business Times yesterday.

Despite the grim outlook, some analysts believe there are opportunities for banks to mitigate job losses by investing in employee upskilling programs and digital transformation strategies that incorporate workforce retention.

“Banks need to shift their mindset from retrenchment to reskilling. Digital transformation should not just be about replacing human workers with machines but rather about creating new roles in digital banking, cybersecurity, data analysis, and fintech development,” said technology and banking strategist Vivian Mlambo.

Other experts argue that the Government of Zimbabwe must step in with policies that support both businesses and workers.

A more stable monetary policy, improved investor confidence, and incentives for businesses to retain employees could help cushion the economic blow.

Additionally, calls have grown for the Reserve Bank of Zimbabwe (RBZ) to reconsider some of its monetary policies to restore confidence in the banking sector. “Inflation control, exchange rate stability, and policies that encourage long-term lending are critical for restoring stability,” said financial markets analyst Tapiwa Gumbo.

The carnage in Zimbabwe’s banking sector reflects a broader economic challenge that has left thousands of workers jobless.

As financial institutions battle a turbulent macroeconomic environment, the wave of retrenchments is unlikely to end soon.

For affected employees, the future remains uncertain. While banks defend their restructuring moves as necessary for survival, the human cost of these decisions is undeniable.

With no immediate signs of economic recovery, Zimbabweans must brace for more job losses, not just in banking but across all sectors of the economy.

As the country grapples with rising inflation, currency instability, and shrinking business activity, only decisive policy interventions and strategic workforce planning can prevent further bloodshed in Zimbabwe’s job market.