This archive report was first published on 23 April 2020.
As the Covid-19 pandemic continues to affect businesses globally, Java House, a leading restaurant chain in Kenya, has taken a drastic measure to cut costs. The company has slashed staff salaries by 40 percent, affecting nearly 2,000 workers.
The decision was made in a letter to staff, which stated that the reduction would take effect from April 1, 2020. The letter, signed by Human Resource Manager Christine Wanjiru, read: 'We therefore write to notify you that your gross salary will be reviewed downwards by 40 percent effective April 1, 2020 making your new gross salary (figure withheld)'.
Java House has been one of the hardest hit by the pandemic, with low customer numbers due to social distancing and stay-at-home measures. Bars were ordered closed by the government, and restaurants that remain open only serve takeaways. As a result, the company has closed some outlets and reduced operating hours in others.
Despite the challenges, Java House is moving forward with plans to expand its online delivery services for its new restaurant concept, Kukito. The company currently runs four brands, employing over 2,000 workers, and plans to grow its express outlets.
Other corporates, such as Kenya Airways, have also taken pay cuts to preserve cash and cut costs. However, the wage cuts have been opposed by Parliament, with the National Assembly's Finance and Planning Committee recommending that employers grant unpaid leave days to staff during the pandemic.
