K22 wrote:Does restructuring always mean retrenchment? 
....
Good question.
Answer: a big resounding NO.
So why do CEOs and their management do it? Surely if you look at all the expense items in a company's Statement of income/P&L, there are many others which can be trimmed/contained, and not always, just staff costs?
My take is that CEOs and management that do not look exhaustively at other cost items where to trim corporate fat are just plain lazy. True, staff costs often constitute the highest %age of costs but a business changing any of its processes, its business model, how it conducts its operations in order for its model to be leaner, meaner and more efficient, etc (i.e business process re-engineering) may actually reap even more dividends than one that travels down the easier much-travelled downsizing route.
Why i find Barclays and kcb's move kubaff is that they have ALREADY spent fortunes training the same guys they are retrenching - seminars, inhouse and external training locally and offshore - meaning the banks were in effect, mere training grounds for the other smaller banks that will snap the marketable ones fast. Retrenchment packages don't come cheap, so add this to the training costs, and you are staring at a huge labour bill for the 2 banks. Could it have been avoided? Maybe..just maybe.
But then again, maybe their staff structures were top-heavy with high monthly salary bills...and kicking them out to hire tumwanas from the Uni. with low entry salos will be much cheaper...
Why are kenyan banks retrenching yet they have been on a strong growth trajectory, posting the highest profits in any sector after telecommunications (read Safcon), one may ask? One plausible reason is that in a climate of increased competition and jostling for more market share you can only boost your profits by either: increasing the topline or shedding some costs as a way of boosting your bottom line? So if both your topline n bottom line have both plateaued, cutting costs is the only option. But which cost?
CEOs management, consider all options when cutting costs, think and plan short term, mid term and long term for your organizations.
If BBK n KCB had planned well for the current staff base 3-4 years ago, would they be now seeking extra funds to pay off their retirees some not-so-golden handshake,and risking disagreemnets and litigation at the labour/industrial court, huh?