Staff shake-up leaves five Equity executives jobless

Kenya’s biggest bank by customer base, Equity, has sent five senior managers packing and wound up its investment banking arm, leaving 15 employees jobless.

The shake-up, billed as one of the biggest since Equity entered the retail banking scene five years ago, is partly the result of a re-organisation programme that began early this year with the merger of departments that left some top managers without portfolio.

Top on the list of those who have been laid off are two directors – Gakuru Wahome and Rodney Schuster – and three senior managers who headed the finance, IT and risk management departments.

Dr Wahome, the architect of Kenya’s development blueprint the Vision 2030, joined the bank two years ago as an executive director in charge of marketing, advocacy and policy, while Mr Schuster served as a director in charge of regional expansion.

Three general managers Allan Mwangi (finance), Peter Gachau (IT) and Papius Muhindi (Risk Management), have also been replaced, while the fate of Dr Catherine Munene, the head of human resources, was unclear.

People familiar with the matter said the shake-up is the culmination of a major strategy and business review that the bank’s chief executive James Mwangi announced to staff at the beginning of the year, soon after the bank closed down its Alternate Business Channel (ABC) and laid off its business growth and development managers who serve as the marketing managers.

The decision was, however, nullified following an upsurge of customer complaints over inaccessibility of point of sale (PoS) termini used across the market.
Equity, which broke all banking sector growth records between 2004 and 2007 has been under immense pressure since last year when a combination of a slowdown in economic growth and the January 2008 political turmoil brought its micro lending business to a near standstill squeezing its profits to single-digit levels.

Some market observers, however, maintained that Equity was merely doing what was inevitable, having created so many positions that lacked clear jurisdictions that became points of persistent friction among senior managers.

“A shake-up of the executive suites was inevitable given the recruitment spree that the bank went into when its growth was robust,” said a senior manager who cannot be identified because he has committed not to speak to the media as part of the severance deal.

Though the shake-up is being seen as part of the many changes that strategists have recommended to the bank as it enters the next phase of growth, one of the managers who lost his job described Equity as a one-man show with no room for professional input at any level of the organisation.

“This might look like a normal restructuring, but the question that investors should be asking is why such a large group of professionals could leave an organisation within such a short span,” he said. “The majority of senior staff leaving have long experience having worked for various organisations both locally and internationally and they cannot all be incompetent,” said the source.

Equity did not respond to our questions on this subject, but sources close to it said the main challenge that the bank has had to deal with is the lack of strong organisational structure to give it a sense of stability.

The January shake-up, for instance saw Dr Gakuru transferred to head the newly created Leadership and Development unit and his former brief of marketing, advocacy and policy moved to the CEO’s office.

It was not lost to observers that Dr Gakuru had been on the job for only two years.

Source: www.businessdailyafrica.com

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