Tough Times as Companies Lay off Workers
East African Portland Cement (EAPC), has been making up to Ksh8m daily. This is one of the reasons that has resulted to its plans to lay off all of its employees in its restructuring strategy.
CEO Stephen Nthei, indicated that all the company positions will be declared redundant both for permanent and contracted employees.
The company has attributed its losses to increased output prices and production challenges.
This is not the first time the company is going through hard times, in 2016 the company fired 1,000 employees, indicating that at the time the company was overstaffed.
In 2018 the company laid off about 500 employees. Following this tribulations the Auditor General Edward Ouko termed the company as insolvent as it had failed to pay its debts.
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 signaling tough times ahead.
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.
Stanbic Bank has offered permanent and pensionable employees a voluntary early retirement package which they can chose to accept or decline. The bank has also offered ex-gratia paymentcalculated at the rate of 1.5 month’s for each year of service. Also in the package is payment in lieu of notice as per the individual employment contract, retention on the medical scheme for the remainder of the calendar year up to 31st December 2019 and 25% loan discount on the immediate settlement of any outstanding staff loan balance. National Bank also fired over 100 employees in June 2019, Barclays Bank in 2017 fired 323 and Family Bank 150 of its employees.
Analysts attribute the mass layoffs to the high cost of production and labor as well as increased use of technology
The unemployement rate in Kenya had reduced in 2018 to 9.3% from 11.5%, however this could change with current layoffs.