Job cuts loom in First Mutual and Nicoz Diamond merger plan

Job cuts loom in First Mutual and Nicoz Diamond merger plan

- in Markets, News
First Mutual Park

… The two firms will be stronger but workers will be the biggest losers

By Donald Tafadzwa Chidoori

Scores of workers are set to lose their jobs in the anticipated merger of First Mutual Holdings Limited (FMHL) and Nicoz Diamond Insurance Limited (NDIL), it has emerged.

Unconfirmed reports say that $1,5 million dollars has been set aside to pay for packages of the retrenched workers if the merger goes through on 31 August 2017.

On August 10, First Mutual Holdings announced through a circular that it would be holding an Emergency Shareholders meeting to vote on the merger.

It is understood that the merged entity would have had total assets of US$283.4 million and shareholders’ equity of US$52,4 million had it been implemented on 31 December 2016

If the merger goes through the non performing short-term insurance subsidiary of First Mutual Holdings, Tristar Insurance is expected to be disbanded as NDIL and Tristar Insurance will be merged into a single short-term insurance entity.

The circular announced that FMHL would eliminate duplicate functions in the two firms but was however, worryingly silent on how they would deal with duplicate job positions.

Unconfirmed reports from the two firms, however, indicate that employees have already been alerted of the impending layoffs. The criteria or method  that will be used to retrench workers  is however, still unclear.

No official communication of the impending layoffs and reasons thereof have been issued. The layoffs could be about reducing costs or fiscal responsibility but whatever the reason, a lot of people will be out of work and that’s never a good thing, at a time when the job market is already shrinking.

As the figures show the merger will definitely increase FMHL’s market share, boost its revenue and earnings, but, scores of workers will lose their jobs in the process.

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