This archive report was first published on 15 June 2020.
June 15, 2020 - The South African office of Ernst & Young has sent shockwaves through the Nairobi office with the intention to lay off 42 senior and long-serving managers, sparking tension and unanswered questions.
The move has left many wondering about the motivations behind the decision, especially given the firm's strong financial position.
According to outgoing CEO Gitahi Gachahi, the firm has been performing well financially, raising questions about the motivation of the head office to lay off the workers.
"The redundancy decision could not have been informed by sub-optimal performance or profit dilution," said Mr Gachahi, questioning the wisdom of the decision.
Ernst & Young is one of the world's four biggest audit firms, and the Kenyan office falls under its Eastern cluster, which includes Ethiopia, Kenya, Uganda, Tanzania, and Rwanda.
Some regional offices are understaffed, making the redundancy notices all the more questionable, sources at the company said.
One affected staff member received a letter stating that their contract would be terminated on July 2, citing redundancy as the reason.
The workers are worried that being laid off during the Covid-19 pandemic period will make it difficult for them to secure new jobs, given that companies are scaling down operations to cut costs.
They also protested that they were not consulted on whether they could be put on lower pay, as has happened in other organisations.
"Other leaders have engaged their people, agreeing to reduce salaries by an agreed percentage until the situation stabilises," said one employee. "Unfortunately, the ugly face of capitalism gains an upper hand even as the world is faced with such a catastrophe."
The employee also questioned why the South Africa office was using performance reviews for the last three years, when industry practice is to use the current year to make decisions affecting staff.
This raised questions over whether the jobs would be given to foreigners once Kenyans had been sent home.
Outgoing CEO Gitahi Gachahi described the decision as a "back-handed compliment," saying it was particularly painful when there was no compelling economic reason for such a drastic action.
In its letter to the affected staff, the company acknowledged the difficult times and offered counselling services.
