Voluntary lay offs for EcoCash staff

Herald Reporter

Following shareholder approval of the transfer of EcoCash Holdings Zimbabwe Limited’s (EHZL) fintech businesses to Econet Wireless Zimbabwe Limited (EWZL), management has extended voluntary and mutual separation offers to staff in EcoCash Holdings Zimbabwe Limited.

The move follows a Scheme of Reconstruction which was first announced by EWZL and EHZL at the beginning of the year and obtained EcoCash Holdings shareholder approval at an EGM held on April 17, 2024.

Among the reasons cited for the Scheme of Reconstruction was the need for the consolidated business to streamline a number of duplicated roles and activities, to enhance synergies and preserve shareholder value.

This would necessitate staff rationalisation across the EHZL and EWZL businesses.

A spokesman for the company said: “Management have started the process of operationalising the Scheme of Reconstruction. And while other consultations with various stakeholders progress, they have offered interested staff the opportunity to consider and exercise the option of voluntary separation”.

The EHZL fintech businesses that have been transferred and consolidated into EWZL include EcoCash (Private) Limited, VAYA Technologies Zimbabwe (Private) Limited, Econet Insurance (Private) Limited, Econet Life (Private) Limited, MARS Zimbabwe (Private) Limited and Maisha Health.

However, in recent announcements, Econet indicated that bringing the fintech business back under its control would create a more formidable entity. The company sees an opportunity to leverage its extensive subscriber base of over 14 million and established delivery channels to propel the fintech businesses to another level.

The telecoms giant is also cognisant of the significant shift in the market landscape since the 2018 demerger to form a stand-alone fintech business.

Regulatory changes and evolving market dynamics have rendered some of the initial justifications for the separation obsolete. By reuniting the entities, Econet argues that it can streamline operations, improve efficiency, and offer a more comprehensive suite of products and services to its customers.

The telecommunications group said the combined entities had lost significant value post-separation.