Kenya Power staff repairing the Loyangalani-Suswa power-line, December 2021. [Antony Gitonga, Standard] Kenya Power wants to let go of 1,962 workers in what the utility firm says is meant to manage staff costs, which have “increased to unsustainable levels.”
But a look at its financial books shows the move is not a magic wand to fixing costs and steadying its wobbly performance.
The firm has several mountains to climb – high debt, negative working capital, high operating costs and tainted public image of its services. READ MORE
Fixing staff costs may be the smallest of the mountains, yet still, a slippery one to climb. Kenya Power’s disclosures show that between June 2017 and December last year, the utility firm has seen its workforce drop by 1,452.
In short, the utility firm has in four and half years cut its workforce by 13 per cent – going by the peak of 11,295 workers by the end of June 2017 before this started going down.
But the fall in staff numbers, thanks to death, termination, expiry of contracts, resignations and retirement has seen no fall in salaries and wages.
In the 2016/2017 financial year, Kenya Power spent Sh14.94 billion on salaries and wages when it had the highest staff count of 11,295. And in the financial year ended June last year, the power distributor forked out Sh16.98 billion for its 10,177 employees at the time.
This means that despite the staff count falling by 1,118 between June 2017 and June last year, the spending on wages and salaries went up by Sh2.04 billion.
Kenya Power says if it retains its current workforce of 9,843, salaries and wages will be Sh14.1 billion – an Sh840 million saving from what it spent when it had 1,452 more workers to pay in the 2016/2017 financial year. Wages and salaries made up 42.6 per cent of Kenya Power’s operating expenses in the year ended June 2021.
Achieving the targeted 11 per cent payroll saving by parting ways with a fifth of its workers, therefore, promises to be a tall order given the firm has seen a rise in payroll spending despite a 13 per cent fall in staff size in four and a half years. In the 2016/2017 financial year, Kenya Power spent Sh14.94 billion on salaries and wages. [Sammy Omingo, Standard] Yet, the utility firm wants to spend Sh6.26 billion on an employee separation programme and filling of 60 per cent of […]
