Hertta-Maria Amutenja
One of the leading financial service providers, Momentum Metropolitan Namibia (MMN) has announced to its employees that it will embarked on a retrenchment exercise to save N$10 million on its payroll cost.
The decision follows a business update engagement held between Group Chief Executive Officer Sakaria Nghikembua and all MMN employees, via the Microsoft Teams platform, on Monday.
According to an internal memo seen by this publication the company has invited all employee levels in the Life Business, except for Sales Managers and Salespeople to apply for a voluntary retrenchment which is due end of next month.
The first phase of this exercise is said to be voluntary, however, a subsequent involuntary retrenchment phase may be necessary if the required cost savings have not been achieved in the first phase.
“At this stage, the company would like to invite employees, who are interested in accepting voluntary retrenchment, to note their interest. As already indicated, this invitation is open to all MMN Life employees, other than those holding direct sales roles. The retrenchment exercise will not apply to employees in non-life businesses. In addition, the Company retains the right to decline retrenchment applications from employees, who may be considered critical to the operations of the business because of their skills or experience,” said Nghikembua
In addition to the document, he said as MMN Long Term Insurance or Life Business operations continue to face a scale challenge which means that the expense base in the Life Business is high relative to the policy book.
“This has resulted in the business experiencing negative Value of New Business (VNB) for the past five years. Various measures have been implemented to reverse this situation. This includes Distribution Channel reforms, as well as cost reduction measures. Whilst the Life Business has been containing its expenses over the past years, and has begun to see positive results in policy growth, particularly in the last four months, there is a need for further expense reduction measures whilst continuing to focus on growing the policy book to secure its sustainability,“ he added.
The document indicates that MMN has offered to pay a severance pay equal to two week’s remuneration for each year of continuous service with MMN and that for all approved voluntary redundancies, the date of termination of employment shall be 30 September 2023 to allow for sufficient time to ensure compliance with all applicable statutory requirements in terms of the Labour Act.
