Access Bank’s CEO announces 40% pay cut via Microsoft Teams

The on-going salary cuts ravaging across several sectors of the Nigerian economy have spread to the doors of the banking industry. While some were surprised, others already expected that some Nigerian banks would either ‘right-size’ their staff strength or slash salaries.

A few days ago, the Group Managing Director of Access Bank, Herbert Wigwe, held a meeting, tagged Employee Town Hall Meeting, with some staff of the bank via Microsoft’s Teams (video) and informed them of some strategic moves that the financial institution would take this month to ensure it weathered the ravaging effects of the present crisis shaking the world.

According to him, the decision would affect the bank’s 5,870 permanent staff starting with him, as his salary would be cut by 40%. Sources within the bank informed Nairametrics that he had initially held a session with the staff, engaging them on what decisions needed to be made regarding salaries, especially considering the effects of Covid-19 on the economy. He gave staff the options of either downsizing or accepting cut salaries. Majority of the staff present at the online video meeting on Microsoft Teams chose the lesser evil of cutting salaries.

After this, he had another meeting with staff via the same Teams where he finally announced that there will be salary cuts.

“One thing that has come out from the lockdown is that digital is the way forward. We do not need the complement of staff to take us to where we are going. It has also shown that non-essential staff, particularly from the outsourced staff, may not be at the level that we require to be in the future.

“We do not need all the security personnel, cleaners, tellers among others that we have now, considering the fact that not all our branches would be open between now and December. We will talk to the employers of that number of staff, which represent about 75% of our staff strength, to rationalize to the level we think would make us a customer-oriented financial institution that we are.

“We are also looking at a professional cut. I understand that that is very tricky because it comes with pains. I will be the first to take the heat and I will take the largest pay cut as much as 40%. Everybody may have to make some adjustments of the sort. We understand the difficulties people are going through but also understand the higher calling of creating an institution that can continue to provide for us. When things improve tomorrow, we shall revert to normal. We understand the difficulties facing the people but we have to protect our franchise.” Herbert Wigwe.

Access Bank acquired rival Diamond Bank Plc last year and that partly contributed to a 31% increase in operating expenses. Personnel, recruitment, and training costs account for more than a third of overheads after the deal boosted employee numbers and resulted in “wage harmonization” across the businesses. As at December 2019, Access Bank’s personnel cost was about N76.9 billion, up from N57.1 billion same period in 2018. The spike was mostly due to the merger with Diamond Bank where it also absorbed legacy Diamond Bank staff.

Meanwhile, Nigerian banks are also facing the threat of rising bad-debt levels, as a crash in oil prices and the risk of a naira devaluation coincide with the Covid-19 pandemic that has shuttered businesses. UBA, another mega Nigerian bank, had announced a rightsizing earlier in the year.

Access Bank is yet to issue a press release on this issue at the time this article was published.

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