This archive report was first published on 8 August 2019.
On August 8, 2019, East African Portland Cement (EAPCC) made a shocking announcement: it would be declaring its entire workforce redundant, effectively firing its entire staff and asking them to reapply under new terms.
The cement maker cited losses of up to Sh8 million every day as the reason for this drastic measure, stating that it could no longer continue to incur such significant losses.
According to a leaked internal memo signed by acting managing director Stephen Nthei, the company's market share had drastically reduced over the last three years, impacting negatively on sales and subsequent profitability.
Mr Nthei attributed this decline to increased competition and inadequate working capital, stating that the company's basic challenges touched on its ability to meet crucial performance indicators, including staff costs.
With a total staff count of 936 as of June 2018, the loss-making firm has now been forced to restructure its operations, including a staff rationalisation programme to balance its running costs and current levels of productivity.
Under the terms of termination, staff will be given a notice period according to their individual contracts, as well as severance pay for 30 days for every year worked, payment of all accrued gratuity to the date of separation, and payment of their accrued leave days.
