Java House slashes wages by 40pc as Covid-19 bites

A Java House branch. The firm cited tough operating environment for the deep wage cut affecting nearly 2,000 workers. FILE PHOTO | NMG The Java House restaurant chain has slashed staff salaries by 40 percent in a move aimed at cutting costs as the coronavirus pandemic bites.

A letter to staff said the reduction takes effect this month.

The hotel sector has been one of the hardest hit by low customer numbers as social distancing and stay at home measures are enforced to curb spread of the deadly respiratory disease.

Bars were ordered closed by the government while restaurantS that remain open only serve takeaways. This has seen chains such as Java close some outlets and reduce operating hours in all the others.

In the letter, Java said its workers will have to take a pay cut due to the tough operating environment.

“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),” reads the letter to a worker signed by the human resource manager, Christine Wanjiru.

“We will continue to monitor and analyse the development as time progresses and will update you accordingly,” she said.

Ms Wanjiru further indicated that Java will advance annual leave to workers who have exhausted leave days.

This comes as the chain moves to expand the online delivery services of its new restaurant concept dubbed Kukito, launched late last year.

Java House Group currently runs four brands — Java restaurants, Planet Yogurt, 360 Degrees Pizza, and the fast-food brand Kukito employing over 2,000 workers.

It also plans to grow the branch count of its less capital-intensive express outlets.It has four express outlets at USIU-Africa main campus off Thika Road, Aga Khan, Nairobi and M.P. Shah hospitals as well as on Peponi Road, which serve vegetarian meals.The wage cuts will see Java join corporates such as Kenya Airways whose top managers have taken a pay cut of up to 35 percent to preserve cash and cut costs amid the coronavirus outbreak that has hurt businesses across the globe.The wage cuts, however, have been opposed by Parliament.The National Assembly’s Finance and Planning Committee has recommended employers who are currently struggling only grant unpaid leave days to staff during the pandemic.

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.

Leave a Reply