Britam to sack 140 staff in fresh turnaround plan

Britam Holdings Managing Director Tavaziva Madzinga (left) takes over from Benson Wairegi last month. [John Muchucha, Standard]

Britam is set to lay off nearly 140 employees, many of them in the management. The restructuring exercise is expected to help the firm to cut down on costs and grow profit.

The Nairobi Securities (NSE) listed insurer said it is embarking on a new business strategy, whose implementation will result in the elimination of some roles. The exercise is expected to affect between 10 and 15 per cent of the staff across its business. The company had 923 employees in the year to December 2019, according to its annual report.

The exercise, which commenced on February 26 and expected to be completed by end of May this year. It will cost up to Sh700 million. “The reorganisation is expected to lead to a leaner executive team with fewer reporting layers that will support the company’s growth in an increasingly competitive business environment,” said the company in the statement.

“The review of the organisational structure is also expected to significantly improve service standards, reduce corporate and shared service costs, reduce unnecessary overlaps and put the customer at the centre of the business.”

Britam said the new structure was in line with the business strategy it is implementing for the period 2021 to 2025.

It noted that employees in the affected roles and positions are expected to exit the business under a Voluntary Early Retirement (VER) programme. It said the exiting staff will get “an attractive package that is well above the industry average”.

“The entire process will entail the review of roles and a VER Programme will be implemented for roles falling off the structure. The entire exercise will be concluded by end of May 2021,” said the company. “The entire separation exercise will cost the company between Sh600 (million) and 700 million. It is a significant investment yet a necessary step in supporting a new strategic approach to ensure the strategic relevance of our business.”

This year’s process followed a 2018 restructuring exercise in which the company spent Sh464 million to lay off 110 employees. “Every new strategy not only requires a review of previous performance but also seeks to equip the business with new tools to drive even better performance in the future,” said Britam.

“Whilst the last two business strategy review processes have required some restructuring and VER, this does not mean that in the future these are the tools to be applied. Every decision is made with the prevailing business facts at hand.”

The new business strategy that the firm has started to implement comes after the exit of the long-serving chief executive Benson Wairegi, who retired at the end of January after 40 years of service.

The company named Tavaziva Madzinga the new managing director effective February 1. He is an actuarial scientist with more than 20 years of experience in the insurance industry. He served as chief executive of Swiss Re (UK and Ireland) and Old Mutual (Kenya).

Britam reported a net loss of Sh1.6 billion over the first half of 2020, compared to a profit of Sh1.7 billion during the same period in 2019.