This archive report was first published on 1 August 2019.
On the heels of the planned merger between Airtel and Telkom Kenya, the latter has announced a major restructuring effort that will leave over 500 employees jobless. The move is aimed at achieving efficiency in operations by matching cost needs with the workforce.
According to a redundancy notice sent to staff, Telkom Kenya's chief executive Mugo Kibati has initiated a consultative period between the business and staff to gather suggestions, ideas, and queries. The notice reads: 'Telkom Kenya will discontinue the transferred business and must terminate the employees that are currently deployed to serve in these functions as a consequence of the transaction.'
However, employees whose lines of business have not been affected will be retained in a 'redefine Telkom organization.' The Joint Venture Company might consider offering employment to some sacked employees 'subject to positions being available in the new organization and those individuals meeting the recruitment criteria,' said Kibati.
The announcement comes just two weeks after the Communications Authority of Kenya (CAK) said it will approve the merger, which will give rise to a new operator, Airtel-Telkom. The regulator gave many parties opposed to the merger a month to present any objections.
Under the deal, Telkom Kenya's real estate portfolio and specific government services will not form part of the combined entity. The final shareholding will be determined at the closing of the transaction, with Telkom Kenya having the option of holding up to 49 percent of that shareholding.
As part of the merger, Airtel Kenya is swallowing Telkom Kenya in an arrangement that London-based Helios Investment Partners banks on to fatten the investment for a profit before exit. The telecoms market leader, Safaricom, has a market share of 62.4 percent in mobile subscriptions, followed by Airtel with 26.1 percent, and Telkom Kenya with 7.9 percent.
