Bloomberg News

Barclays’ Absa Challenged by Union Over Looming Job Cuts

September 01, 2011

(Updates with bank comment in fourth paragraph.)

Sept. 1 (Bloomberg) -- South Africa’s Solidarity labor union said it is applying to the country’s Labor Court for an interdict to stop planned retrenchments at Absa Group Ltd., the lender controlled by Barclays Plc.

Some staff at Absa have been asked to relocate from Pretoria to Johannesburg and may be retrenched if they don’t move as the bank tries to centralize some of its functions, Ilze Nieuwoudt, a spokeswoman for Solidarity said in an interview on her mobile phone today. “At this stage information is very scarce, but if on a small scale we’re already seeing events like this, maybe there’s more to come.”

On Aug. 2 Absa said its first-half profit rose by almost a fifth to 4.58 billion rand as bad loans declined and the lender contained costs with its cost-to-income ratio declining to 54.8 percent from 56 percent a year earlier. While rival Standard Bank Group Ltd. said it was cutting more than 2,000 jobs last year as its growth slowed, Absa and competitors like Nedbank Group Ltd. have grown profit and have not announced mass retrenchments.

“We have no mass retrenchment programme in place,” Louis von Zeuner, the group’s deputy chief executive officer, said in an e-mailed statement today. “We continue to focus on programs that enhance efficiencies and effectiveness by reducing duplication.”

While Solidarity said it has been left out of consultations, three representatives of Sasbo, a South African labor union which acts for workers in the financial services industry, were not immediately able to comment because they were in meetings with Absa today.

--Editors: Frank Connelly, Jon Menon

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net


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