SKS Microfinance to retrench 1,200 staff, close 78 branches

SKS Microfinance Ltd will retrench 1,200 field staff in Andhra Pradesh as it is closing down 78 branches. Currently, the Hyderabad-based company has 3,400 employees in 180 branches in the State.

“Closing down and reducing branches are extremely painful decisions for us but these have become urgent in view of the present financial situation,'' Mr M.R. Rao, Managing Director and Chief Executive Officer, SKS, said in a release on Thursday.

TWO MONTHS SALARY

When contacted, Mr Rao told Business Line that the field staff would be given two months salary and 15 days pay for every one year of service they had put in the company.

“Today, we convened a meeting with the local leadership in various regions. They are confident of implementing the decision smoothly,” he said. For about 18 months since the beginning of the Andhra Pradesh crisis in October 2010, the company did not retrench anybody.

“We are also full in terms of headcount in other states as well,” he said.

On the recent decision of the board to shift the registered office to Mumbai, Mr Rao said the decision was taken because of lack of business in Andhra Pradesh and the presence of many financial services in Mumbai.

The top management, however, would continue to operate from Hyderabad for some time, he added.

nagsridhu@thehindu.co.in