Recession Biting Harder: Banks, Others Slash Workers’ Salaries

Following the effects of the current economic recession in Nigeria, most banks and insurance firms have slashed their workers’ salaries by between 20 and 50 per cent.

Investigations revealed that Diamond Bank Plc, Heritage Bank Plc, Zenith Bank Plc, First Bank Plc and Wema Bank Plc have reduced their workers’ salaries as of August 31, 2016. This has also been confirmed by management sources and workers in the affected banks.
According to Punch, while Diamond Bank was said to have slashed salaries by 30 per cent, Heritage by 30 per cent, First Bank and Wema Bank workers’ salaries were slashed by 20 per cent each.

It was learnt that the banks tied the decision to cut salaries to workers’ ability to meet deposit targets, which have become unrealistically high in recent time. Hence, workers who failed to meet their targets had their salaries slashed.

Investigations also revealed that some insurance companies have extended the targets of premium generation to their employees.

Before, the marketing departments of the underwriting firms and insurance agents were responsible for generating premium for the companies.

Due to the economic crisis in the country, many insurance firms increased the targets for marketing departments’ workers with threats of not paying them salaries if they failed to meet the targets. As such, insurance workers who failed to meet their premium targets, according to industry sources, also had their salaries slashed.

An insurance employee, who spoke to Punch, said, “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.”

A Zenith Bank worker, who simply identified herself as Nkem, confirmed the slash in salaries.

Nkem said she resumed work after her annual vacation only to discover that she didn’t get the same salary that she had always received.

Similarly, another Zenith Bank employee, who spoke on condition of anonymity, said that there was eight percent cut in their salaries, beginning from August.

On the fear that some workers could be sacked, the source said such fear had always been there, but the current one was beyond description.

He said, 'The problem now is there has not been any promotion since last year, which seems strange.'

An employee of First Bank, who spoke on condition of anonymity, said that he had been sleeping and waking up in worry in the past two weeks due to fear of being sacked.

The banker, who just got married in Lagos, said workers had received an email from First Bank’s Managing Director about a "new development soon".

He said, “We have been receiving hints of more lay-offs due to the economic recession in the country, which has deeply affected the banking sector. Some employees lost their jobs two months ago. We also learned that another set of people will be laid off between September and October.”


National Union of Banks, Insurance and Financial Institutions’ Employees confirmed the saga in the banks to Punch. NUBIFIE Secretary General, Mr. Mohammad Sheick, said the issue had become a serious concern to the union.

Sheick said, “There is apprehension in the banking sector. Recently, there was mass sacking by banks and 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.”