Old Mutual Zimbabwe may retrench 10% of its staff

Old Mutual Zimbabwe may shed 10% of its workforce in an effort to resize the business.

In an email to employees, seen by Fin24, Old Mutual Zimbabwe said it is offering a retrenchment package to at least 10% of its staff.

The company has given staff until the end of April to consider the exit package. This, according to sources, could result in at least 100 workers being retrenched.

Old Mutual Zimbabwe's decision comes at a time when businesses in Zimbabwe are facing harsh economic conditions.

Cost containment initiatives implemented by management in response to the tough operating environment helped the group record a strong set of results for the year ended December 31, 2018.

Old Mutual Zimbabwe chief executive Jonas Mushosho told analysts last week that operating profit was up 23% to RTGS$79.2m driven by profit growth in its life, banking and asset management businesses.

Zimbabwe introduced a new currency called the RTGS$, or real-time gross settlement dollar, in February.

Old Mutual Zimbabwe's total assets, meanwhile, increased by 41% to RTGS$4.4bn driven by growth in investments and securities as well as loans and advances.

"We managed to contain operating expenditure in the face of rapidly rising inflation particularly in the last quarter of the year," Mushosho said.

"The declining expenses in a challenging high inflationary environment demonstrates the fruits of the investments we've been making in information technology systems. We can now realise efficiencies and reduced expenses without compromising growth and customer service," he said.