The Reserve Bank of Zimbabwe on Friday dismissed about 1,500 workers - 75 percent of its work force - giving each one of them a US$5,000 golden handshake as part of a severance package double that amount for a total cost of US$15 million.
Many Zimbabwean public servants are making less than US$200 a month.
Sources said the retrenched RBZ staff members were seen leaving the bank's Harare offices at noon after a meeting with senior central bank officials. Sources said the RBZ drew US$7.9 million from the Ministry of Finance to fund the operation.
The mass retrenchments are part of a restructuring exercise at the bank recommended by the International Monetary Fund, leaving 493 workers out of 1,948.
RBZ Governor Gideon Gono told the state-controlled Herald newspaper that the bank is being streamlined so it can better focus on its core competencies. He said he hoped the country would not slide back into instability which he blamed for the economic crisis that peaked in late 2008 amid roaring hyperinflation most blamed the RBZ for causing.
Economic commentator Bekithemba Mhlanga said the RBZ layoffs will pave the way for transformaiton of the institution. “At long last, we think that sanity will finally prevail at the RBZ which has over the years been used by [President Robert Mugabe's] ZANU-PF for engaging in political programs meant to benefit its members,” Mhlanga said.
Gono was widely blamed for the bank's funding and management non-core activities such as land reform and an ill-fated farm mechanization scheme.
Forced auctions of RBZ assets conducted last year to pay off creditors included so-called Scotch carts - rudimentary farm implements.
Gono funded such programs by ceaselessly printing Zimbabwean dollars in ever-larger denominations that peaked at 100 trillion dollars, debasing the currency which was eventually abandoned in 2009 in favor of a regime of mixed hard currencies.
The former opposition Movement for Democratic Change sought Gono's dismissal - but he has been kept in place by President Mugabe, a close political ally.