Despite the swirling rumors about a possible retrenchment and major layoffs involving CIMB, the financial group has vehemently denied such move, and insists that it is on track in implementing their business and rationalization plan.
2 weeks back, CIMB announced its decision to close about 60 of its branches nationwide, and consolidate the operations of the closed branches into others. These 60 branches are considered surplus to the bank’s operation.
With the closing of the branches, the total CIMB branches nationwide will be reduced to about 300.
According to the officials, staff working in the affected branches will be redeployed, and may need to undertake different roles or responsibilities.
CIMB has also been urging its employees to go for extended and long leave, lasting between one month and six months, as part of the company’s “Staff Rejuvenation Program.” It expects to save up to RM60 million of operational expenditures through the program implementation.
From the moves, it is quite clear that the bank’s financial muscles were being flexed by the prolonged global economic crisis, which may take years to recover. But some would say they are necessary technical ploys before the company embarks on a large scale expansion once the economy recovers.
CIMB is currently Malaysia’s second largest financial group behind Maybank.
CIMB Group is reported to be ready to close 60 of its branches across the Malaysia operation as part of cost cutting strategy.
All of the sixty branches, considered surplus to the company’s current operation, have been identified and would close shop some time in August this year. The move is expected to help the company to save up to RM60 million per year in expenditures.
It wasn’t said what would happen to the staff working with the affected branches, but the bank is looking at ways to redeploy them into other branches, perhaps taking up other roles and responsibilities. Up to this point, CIMB has denied any allegation that the company will be laying off people in the near future.
Last week, under what was called “Staff Rejuvenation Program”, CIMB encouraged 36,000 of its staff in Asia to go for prolonged unpaid leaves, which can be up to sixth months as the bank is buckling up to face tough economic crisis, which is yet to show signs of desired recovery.
CIMB is today Malaysia’s second largest financial group, and is fast catching up with its rival Maybank. From the look of things, it is quite likely the country will see CIMB to overtake Maybank in the next one to two years. As of March 2009, Maybank, with RM23.6 billion market value, led CIMB by just RM300 million, or just about 1% difference.
CIMB Group, one of Malaysia’s largest financial groups, has urged its staff to take long unpaid leave which can be up to 6 months as the company is embracing the worsening financial situation.
The program was introduced as “Staff Rejuvenation Program” and will begin on April 2009.
Regardless of the name, it is becoming apparent that more companies in Malaysia – big and small – will suffer from one of the worst’s financial downturns in the history of modern economy. It is likely that a few other banks would follow CIMB’s suit. While the country top leaders seem optimistic the country will continue recording positive growth, recession is looming in the horizon.
More than 35,000 of CIMB employees, covering not only Malaysia operation but as well as in Thailand and Indonesia will be affected with the latest offering of option. However, there is yet to be indication on how many of them would take up the offer.
According to the company’s chief, Datuk Nazir Razak, the initial response by the staff was good. He also refuted claims that the bank is preparing to lay off workers.
The bank becomes the earliest local corporation to have asked their employees to go for leave.
Few years ago, the story of deserving CIMB staff rewarded with bonuses up to 10 months of their salary was no stranger before but things could turn out very different this year.