Workers at the East African Portland Cement (PHOTO:FILE) NAIROBI, KENYA: The wave of lay-offs has hit Kenyan companies once again with more than four firms spelling intentions of getting rid of hundreds of workers before the end of the year. Out of over 60 listed companies at the Nairobi Securities Exchange (NSE), 15 companies have so far announced that they are not making enough money signalling tough times ahead. Some analysts attribute the layoff wave to the high cost of labour and production as well as mass adoption of technology. “The cost of labour 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.
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“A lot of companies are also going digital and buying various innovations most of which are now being developed locally; the innovations carry a lot of efficiencies leading to redundancies in some jobs,” he says. He added that the technology wave means many people are going to lose their jobs and forced to rethink their careers and at times, it will call for retraining to fit into the digital economy that Kenya is fast-moving to. Telkom, Stanbic, East Africa Portland Cement, and the Diageo, the parent company of East African Breweries have already issued layoff warnings to workers with some of the retrenchments planned for as early as this month.
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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. The company had 448 permanent and 488 contract employees on its payroll as of last year, with the former being offered a severance package of one month’s pay for every year worked as well as a gratuity payment.
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The company also revealed that it has been making Sh8 million loss daily, making its turnaround strategy untenable. Stanbic bank plans to part ways […]