NAIROBI, Kenya, Sept 26 – Nairobi Securities listed insurer Sanlam Kenya has offered early retirement for staff aged over 50 as the company embraces technology to cut costs.
Group CEO Patrick Tumbo says the company’s operating costs have escalated in the last five years adding that the new strategy would cut costs by up to Sh200 million.
Staff costs at the company stood at Sh943 million in 2018 up from Sh746 million incurred the previous year representing a 26 percent growth.
The company posted Sh639 million in net earnings for the first half of 2019, coming from a Sh1.5 billion loss posted in a similar period last year, attributable to bad investment decisions.
“In this era of technology, this is the way to go. With the implementation of this strategy, what 10 people can do will be done by one person,” Tumbo says.
Previously, Sanlam’s retirement cut off age has been 55 years.
The company’s board has also welcomed staffers under the age of 50 to take up the package.
The staff members have one week to take up the offer, which closes on October 4th.
“By 31st October, we will have communicated those who are successful or not. Those affected will get a good package which includes a whole month salary from every 3 years worked,” Tumbo said.
The announcement comes at a time when the insurer is trying to recover. Last year, the South Africa owned insurance company took a beating when it wrote off bonds owed by Kaluworks, Athi River Mining (ARM) Cement, and Real People Kenya. It had also extended money to troubled Nakumatt Supermarkets.
Sanlam joins the bandwagon of other companies that have been laying off its staff in the last three months to cut costs. Telkom Kenya, Stanbic Bank are East Africa Portland Cement are among the high profile companies that have let go of people as they strive to remain profitable.