As the Zimbabwean economy continues to tumble it is not looking so good for most corporates out there. It has become commonplace for most companies or businesses to downsize or go out of business altogether. The latest company to join the bandwagon is the Central Africa Building Society (CABS). They have decided to shut down 4 of their branches. Bear in mind that this is not the first time that they are doing this. Earlier on in October, they shut down their branches in Mt Pleasant, Dangamvura, CA House and Nkulumane. The unstable operating environment due to an ailing economy has been cited as the major reason why this step has to be taken. The Managing Director actually issued a communiqué to CABS clients which I will quote in just a moment.
Closure Of 4 Branches Imminent
Part of the communiqué issued out read as follows: “Please be advised that in line with our branch rationalization strategy, the following branches will be closing on 31 January 2020: Highfield, Highglen, Letombo, and Norton. All the services will be available at the nearest branches, or any other CABS branch nationwide. For your convenience, mobile banking (*227# and mobile app), internet banking, CABS agents, POS devices, and ATMs will be available for your use.”
Implications And Things To Consider
Obviously the first point of major concern is the loss of jobs. Zimbabwe already grapples with sky-high unemployment rates thus any further job cuts are unnerving. Never mind the fact that if on a job you are probably not getting enough – but getting something is way better than at all. For one to then lose that job it becomes very hard for them to find their footing.
One way to look at it is that CABS is a multinational corporation. This perpetual closure of branches can be more than just about a failure to operate sustainably per se. It could be indicative of decreased confidence in operating in a mercurial economy. That does not water down the premise of vying to operate sustainably because that is most certainly justified. One of the other moves being done by CABS is to merge some branches. This reduces operating costs because staff sizes can be effectively downsized amongst other things.
Consider carefully the part in the communiqué from which it reads, “For your convenience…” The elements highlighted thereafter bring to the fore one of the most significant dynamic nowadays. The internet and tech innovations are awesome because they bring about loads of convenience for both companies/businesses and customers. There is, however, a downside to that – that is job losses.
Harnessing the power of the internet and technology can eliminate the need for having human resources. What makes this even more inevitable is that leveraging on the internet and tech ultimately lowers overhead costs. So in as much as the local economy is struggling, such branch closures can simply be part of a transition to digital banking.
You must also take into consideration the astronomical surge in electronic transactions. This has been necessitated by the prevailing cash shortages but in turn, leads to certain things. One of those things is how necessary or easy it becomes to move to digital banking. The proliferation of internet use, social media, and mobile devices give even more traction to this.
What Is The Bottom Line?
Scenarios like branch closures, such as for CABS, is the culmination of many factors all at once. It also lets us in on insights regarding new and emerging trends. For one, we get to see how technological advancements can threaten job security. Even for entrepreneurs, you get to realize that in business there are times you might have to make difficult decisions. For instance, most well-meaning people would not want to leave someone hopelessly jobless. However, the need to keep a company or business afloat can necessitate that.
This CABS story is one of many relating to companies or businesses across all sectors of the economy. They are tell-tale signs that the economy is in a free fall. Interesting to note also is that such tough times create the necessary grounds for innovation. Yet in some cases, the innovations come with at a cost e.g. loss of jobs.