African Bank's proposed job cuts spark outrage as unions fight to save 1,200 jobs

African Bank has announced plans to retrench 1,200 employees and close 90 branches, prompting immediate backlash from trade unions. The move comes amid reports of a R624 million loss over the six months ending March 2026. The decision has drawn sharp criticism from the Congress of South African Trade Unions (COSATU), which has pledged support to the South African Society of Banking Officers (Sasbo) in opposing the job cuts. The proposed retrenchment, under Section 189A of the Labour Relations Act, is part of broader cost-cutting measures aimed at stabilizing the bank’s financial position. According to COSATU spokesperson Zanele Sabela, the federation has thrown its weight behind Sasbo’s campaign against the plan. She emphasized that the job losses would hit workers and their families hard, especially with South Africa already grappling with high unemployment rates. “Workers should not be expected to carry the burden of what we describe as poor strategic decisions by management,” she stated. Sabela accused African Bank’s leadership of making ill-conceived acquisitions over the past two years, including Ubank, Grindrod Bank, Sasfin Capital Equipment Finance, and Commercial Property Finance. These moves, she argued, were not well-planned and contributed to the current financial crisis. “Now, following a R624 million loss in the half-year to March, it is apparent that its acquisition strategy was not well thought out,” she added. The union federation urged the South African Reserve Bank, as the main shareholder, and the Department of Employment and Labour to take action to prevent the layoffs. “We urge these bodies to intervene and avert this looming disaster,” Sabela said. She stressed that COSATU would do everything in its power to help Sasbo safeguard all 1,200 jobs. Sasbo, representing bank officers, has been actively lobbying against the retrenchment plan. The union argues that the proposed cost-cutting measures could destabilize the banking sector and exacerbate existing challenges. A spokesperson for Sasbo confirmed that the union is working closely with COSATU to explore alternatives to job losses, such as restructuring or operational efficiencies. The potential closure of 90 branches raises concerns about the impact on local communities and customer access to banking services. Many of the affected branches serve rural and underserved areas, where financial inclusion is crucial. Industry experts warn that the job cuts could lead to a decline in service quality and further erode public trust in the banking sector. The controversy highlights growing tensions within the financial industry, particularly around corporate responsibility and employee welfare. With the economy facing headwinds, the debate over how banks balance profitability with social obligations has intensified. Some analysts suggest that the proposed retrenchment reflects a broader trend of cost rationalization in the wake of economic uncertainty. As the situation unfolds, stakeholders are watching closely to see whether regulatory bodies will step in to mediate the dispute. The outcome of this conflict could set a precedent for how similar issues are handled in the future, influencing both labor relations and corporate governance practices in the sector. For now, the focus remains on preventing the loss of thousands of jobs and preserving the stability of the banking system.