This archive report was first published on 9 August 2019.
Kenyan companies are facing tough economic times, with over 60 listed companies at the Nairobi Securities Exchange (NSE) announcing plans to lay off hundreds of workers before the end of the year.
According to analysts, the high cost of labor and production, as well as the mass adoption of technology, are contributing to the layoff wave. 'The cost of labor in this country is very high and that means that if companies cannot rejig their businesses to be more efficient they are going to go down, to avoid going down, the first place to look at basically is how to reduce the labour cost,' says Patrick Obath, Kenya Private Sector Alliance trustee.
Some of the companies that have already issued layoff warnings to workers include Telkom, Stanbic, East Africa Portland Cement, and the Diageo, the parent company of East African Breweries. East Africa Portland, which is the latest firm to announce the retrenchment plan, says all workers will have to go home as competition in the industry and lack of sufficient capital makes it untenable for the firm to operate as expected.
Stanbic bank plans to part ways with around 255 employees in a voluntary retirement package plan. 'The voluntary early retirement is an outcome of a clear strategy, where we are looking at how to become in the business that we run. But also as digitise, and become more digital it means some functions will have to be re-organised as a result,' said Stanbic Bank Kenya Chief Executive Charles Mudiwa.
Meanwhile, Telkom has announced that it will send home hundreds of its workers following an impending merger with Airtel Kenya. 'We intend to terminate the employment of approximately 575 of our employees, on account of redundancy, as a result of the transaction,' says Telkom CEO Mugo Kibati.
Published on August 9, 2019 by The Standard.
