Old Mutual to retrench IT staff

Old Mutual executives have warned IT staff to expect section 189 letters as the company prepares to retrench workers, MyBroadband has learned.

A source with knowledge of the situation told MyBroadband that Old Mutual’s chief information officer, May Govender, and chief technology officer, Dhesen Ramsay, informed all IT staff that they would receive retrenchment letters.

However, Old Mutual denied this, saying it was inaccurate to say that all IT staff would be impacted.

“Impacted staff will receive a letter inviting them to engage in a section 189 consultation process,” Govender told MyBroadband.

Asked what led to the retrenchments, Govender said the process is part of Old Mutual’s ongoing efforts to optimise and transform the business to ensure it is well-positioned for future growth.

“We are actively engaging with all parties involved, including unions and labour relations authorities, to ensure transparency and a legally compliant approach,” she said.

The source, who spoke on condition of anonymity, told MyBroadband that there have been several IT blunders in recent years that have cost the company billions and have led to the retrenchments.

Among these is its South African Transformation IT programme, which the source said has been running for years.

When asked about the initiative, Govender explained that the programme aimed to modernise and transform Old Mutual’s policy administration capability.

“The programme enables Old Mutual to provide a more seamless and intuitive customer experience and propositions,” she said.

However, the source said that when Old Mutual migrated a legacy policy called Greenlight last year, it ended in disaster.

They said clients were double debited and old policies reinstated, among many other issues.

Govender said the Greenlight migration programme was key to Old Mutual’s IT transformation, as it helped modernise critical systems and applications.

“While a limited number of customers may have faced administrative issues, the migration has successfully reduced system downtime and improved transaction processing, boosting operational efficiency,” she said.

The source also said that Old Mutual’s cloud migration to Amazon Web Services significantly exceeded its budget.

They also said that although Old Mutual claims to be the first insurer to have gone completely cloud-based, legacy applications are still running on regular servers.

Asked about the AWS cloud migration costs, Govender said it had nothing to do with the planned retrenchments.

“Management of infrastructure costs is an ongoing exercise and has no bearing on the technology reorganisation,” she said.

She gave a similar answer when asked if Old Mutual was 100% cloud-based or whether some legacy applications were still running on regular servers.

“This has no bearing on technology reorganisation,” Govender said.

The planned IT retrenchments at Old Mutual come after Group CEO and managing director Iain Williamson announced that he would retire early and step down on 31 August 2025.

Williamson submitted his early retirement request after 32 years of service to Old Mutual, the last five of which he served as CEO.

“Iain will work with the Old Mutual board and his successor, upon their appointment, to ensure a smooth and managed handover,” the financial service provider said.

Old Mutual said its board has begun looking for a suitable replacement. It is considering internal and external candidates.