The Effect of Organizational Retrenchment Policy on Employee Productivity (a Case Study of Access Bank Plc, Ilorin, Kwara State)

ABSTRACT This study comprehensively investigates the effect of organizational retrenchment policies on employee productivity in Access Bank Plc, Ilorin, Kwara State, Nigeria. In the context of increasing economic pressures, digital transformation, and regulatory reforms, retrenchment practices such as labor casualization, outsourcing, and technological automation have emerged as dominant strategies in the Nigerian banking sector. While these policies are intended to optimize operational efficiency and reduce costs, their impact on workforce performance, specifically in terms of employee commitment, engagement, and efficiency, remains a subject of ongoing debate and limited empirical evidence, particularly at the branch level. Grounded in the Organizational Justice Theory and the Resource-Based View (RBV), this study adopts a descriptive survey design and collects data from 115 valid respondents across five strategically selected Access Bank branches in Ilorin metropolis. The data were analyzed using multiple regression to examine the structural, psychological, and operational consequences of retrenchment policies on remaining employees. The findings revealed that labor casualization had a statistically significant impact on employee commitment, explaining 52.1% of the variation. Outsourcing practices contributed 57.1% to employee engagement, and technological automation had the most pronounced effect, accounting for 74.1% of the variance in employee efficiency. While these strategies can enhance workforce agility and productivity when properly implemented, the study also identified concerns such as reduced morale, unclear roles, and adaptation challenges. The research concludes that although retrenchment can serve as a strategic tool for organizational sustainability, its success hinges on transparent communication, ethical implementation, and employee support systems. This study offers valuable insights for human resource professionals and bank administrators, emphasizing the need to balance cost-reduction objectives with employee-centered approaches to ensure sustainable productivity in Nigeria’s evolving banking landscape.