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Tough time as Kenyan companies plan mass job cuts

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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.

“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.The company also revealed that it has been making Sh8 million loss daily, making its turnaround strategy untenable.Stanbic bank plans to part ways with around 255 employees in a voluntary retirement package plan.

“The voluntary early retirement is an outcome of a clear strategy, where we are looking at how to become in the business that we run. But also as digitise, and become more digital it means some functions will have to be re-organised as a result,” said Stanbic Bank Kenya Chief Executive Charles Mudiwa.Stanbic joins a number of banks in the country that have been restructuring their operations in line with a changing economic landscape.

In the telecoms sector, Telkom with last month announced that it would send home hundreds of its workers following an impending merger with Airtel Kenya.“We intend to terminate the employment of approximately 575 of our employees, on account of redundancy, as a result of the transaction,” says Telkom CEO Mugo Kibati.

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In February, Telkom and Airtel announced the signing of a binding agreement to combine its respective mobile, enterprise and carrier service businesses in Kenya to operate under a joint venture company to be named Airtel-Telkom.Consequently, the company said in a memo to staff that it will discontinue the transferred business and must terminate the contracts of employees currently deployed in the affected business areas.

“In accordance with the provisions of Employment Act, we have notified communications workers union and sent out letters to individuals affected giving one month’s notice with effect from July 31,” Kibati said.The Joint Venture Company, said Kibati, might consider offering employment to some sacked employees “subject to positions being available in the new organisation and those individuals meeting the recruitment criteria.”

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Business

US investors express interest in pyrethrum

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Pyrethrum farmers are set for good tidings following increased interest in the sector by foreign investors. This follows an announcement by US Ambassador to Kenya Kyle McCarter that investors from his country are already in Kenya scouting to establish pyrethrum processing plants.McCarter said some US investors have already started setting up production factories in Nairobi.

“Pyrethrum is something that Kenya historically has seen a lot of prosperity from, and that market is coming back,” the envoy said during his tour of North Rift region recently. The envoy, who was speaking in Iten, Elgeyo-Marakwet County, said the US will continue supporting investments in Kenya, particularly in agriculture.

The cash crop used in the manufacture of agrochemicals including insecticides and pesticides was abandoned in the late 1990s following declining fortunes occasioned by the loss of key markets.McCarter encouraged pyrethrum manufacturers who had quit the business in Kenya to return, saying there was immense potential in the sector.

“We shall continue our support for agriculture. We have some US investors who are already in Kenya now to invest in pyrethrum. We want to encourage investors who left the country to return,” he said.

Largest producer

Elgeyo Marakwet Governor Alex Tolgos said his county was the second-largest producer of pyrethrum before the loss of market that triggered a shift to potatoes.The county boss noted that farmers from Elgeyo Marakwet highlands were ready for a revival of the crop as soon they are assured of a market.

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“We invite investors from the US to our county. I wish we knew when the production factory was being established in Nairobi. We would have requested them to set it up in Elgeyo Marakwet,” said Tolgos.

He wooed American investors to set up another processing factory in Elgeyo Marakwet, which he noted will reduce transport costs to Nairobi.“Once we are assured of a market, our people will immediately start growing pyrethrum. We will also increase funds to the sector in our subsequent allocations.”Early this year, Nakuru Governor Lee Kinyanjui announced plans to revive pyrethrum through a partnership with four State agencies.

These are Kenya Plant Health Inspectorate Service, Kenya Agricultural and Livestock Research Organisation, the Pyrethrum Processing Company of Kenya and Egerton University.In the 1980s and early 1990s, Kenya was a major producer and player in the world’s pyrethrum sector. Nakuru, Elgeyo Marakwet, Nyandarua, Nyeri, Kiambu, Trans Nzoia, Uasin Gishu, Kisii and West Pokot were the highest producers.

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Africa

Nairobi: Best African city to work in

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Expatriates have voted in Nairobi as the best African city to work in. According to Expat City Ranking 2019, the residents are friendly and fair weather.

Nairobi is the 45th best city to work in, as stated by a survey conducted by InterNations, the largest community for expatriates.

“About 82 percent describe the locals (Nairobi residents) as friendly and 62 percent find it easy to make friends. The local climate and weather has been a top highlight for expat life, with 91 percent of expats rating this factor positively compared to 59 percent globally,” the report said.

South Africa’s Johannesburg ranked 59th globally, Cape Town (65th) and Nigeria’s Lagos (79th).

The respondents also cited that Nairobi is easy to settle in ranking third worldwide behind Kuala Lumpur in Malaysia and Manama in Bahrain.

InterNations has more than 3.5 million members, surveyed over 20,000 respondents in 82 cities around the globe in the 2019 ranking.

 

READ ALSO:   #FirstClassBetrayal: Tear-jerking story of first class graduate who ended up on streets
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Business

Meet China’s 8-year-old coding instructor

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An eight-year-old Chinese boy logged in an online coding lesson not as a learner but as the teacher.

Vita has established a coding teaching channel in the Chinese video streaming site Bilibili in August and has so far gained close to 60,000 followers and more than one million views.

There is a growing number of children in China learning to code long before they even start school. This tendency has been fanned by parent’s conviction that coding prowess will be necessary for Chinese teenagers given the government’s technological drive.

“Coding is not that easy but also not that difficult; at least not as difficult as you have imagined,” says Vita, who lives in Shanghai.

The little boy teaches through his channel to tolerantly take his students, some older than him and young adults, bit by bit through an Apple-designed coding app called Swift Playgrounds

As he teaches, at times, he intentionally makes mistakes to assist in showing the frequent blunders to look out for.

“When I am teaching, I am learning new things at the same time,” adds Vita.

China has been investing a lot in robotics and Artificial Intelligence (AI). In 2017 the government rolled out an AI development plan which recommended programming courses to be taught in both primary and secondary schools.

READ ALSO:   #FirstClassBetrayal: Tear-jerking story of first class graduate who ended up on streets

 

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