Abstract

The effects of economic crisis have been felt by almost all sectors and institutions (both public and private) worldwide and in almost all organisations. As a survival strategy, informed by scaling down of operations, different organisations have resorted to retrenchment. An increasing trend of retrenchment has been noted and it has been argued that retrenchment of employees had become common in the administrative routines of high/medium performing and distressed companies. The purpose of this study was to Assess the Effects of Retrenchment on the Socio-Economic Status of Retrenched Staff in the Private Sector in Malawi”. The target population was retrenched staff from the following financial institutions: Malawi Savings Bank, Inde Bank and Opportunity Bank. In this study, 160 retrenched staff participated and these included 20 (12.5%) from MBS, 45 (28.1%) from Inde Bank and 95 (59.4%) from Opportunity Bank. The study findings have revealed a reduction in the proportion of people able to meet basic and luxury needs after being retrenched and women more than men have demonstrated more vulnerability to economic shocks. The study concludes that retrenchment negatively affects the socio-economic status of retrenched staff as earning power is drastically reduced and emotional status worsens. This study recommends the exercise of caution on retrenchment calling for swift measures to be put in place to curb the socio economic effects with women being targeted as the most vulnerable group. Furthermore, the study calls upon organisations to comply with the existing regulation whilst pushing for amendments in grey areas of the provisions. The study was limited to retrenched staff who were traced and available from three banking institutions which were all acquired by other major banks; therefore, caution must be exercised in the application of the study findings. This implies that further studies need to focus on covering other organisations that had retrenched their staff in other sectors of the economy in Malawi.

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School	: School of Law, Economics and Government
Issued Date	: 2023

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