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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.

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

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.

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

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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By going the solar route, I save Sh140,000 per month, says restaurateur

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Kenya Power was in the news recently complaining that their clients are increasingly transitioning to use of solar energy.

Solar has emerged as a favourite source of power to many homeowners due to its reliability and low cost compared to electricity.

But that is not limited to homes as businesses are also embracing solar energy.

One such business is the new Café Deli branch along Koinange Street.

When the restaurant relocated from Kenyatta Avenue in September, Mr Obado Obadoh, the Managing Director and founder of Nanjala Ltd –the parent company that owns the chain of restaurants — says he wanted to have glass roofing at his new establishment.

This, however, came with its challenges and the option turned out to be expensive since, apart from the glass roofing, they would need ultraviolet (UV) light protectors.

For humans, suntan and sunburn are familiar effects of exposure of the skin to UV light, along with an increased risk of skin cancer.

Solar panels are installed at New Cafe Deli along Koinange Street in Nairobi in this file photo.

Amina Wako | Nation Media Group

But, after consultations with experts, Mr Obado settled for solar panels.

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

“When we were designing the Koinange Street branch, we had experts come in and give their opinions. With the Covid-19 situation, we were also looking for ways to cut costs. With solar, we spent less money than all the other available options,” Mr Obado told the Nation.

“When the costing was done by the quantity surveyor, it came down to almost half of what we would have spent on putting up the glass roof.”

Savings important

 

To Mr Obado, saving even a shilling means a lot and so solar was the welcome option.

“At the Kenyatta Avenue (branch), the cost of electricity per month was between Sh250,000 and Sh280,000. Based on the plan we have, we will use Kenya Power as a backup. This means we will save close to Sh140,000 which is half of what we used to pay before,” he said.

 Mr Omondi Lumbe, the electrical contractor who was in charge of the project, says he installed 96 panels on the roof that coves 250 square meters.

“The panels produce close to 33 kilowatts per hour and are in use for eight hours a day, hence produce close to 264 kilowatts daily,” said Mr Lumbe, who is a partner at Kev & Lum Construction and Electrical Company Ltd.

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

Solar panels are installed at New Cafe Deli along Koinange Street in Nairobi in this file photo.

Amina Wako | Nation Media Group

To avoid more spending, they opted to use solar power directly instead of using batteries to store more energy.

Today, Café Deli only relies on Kenya Power services for between three and four hours, which is mostly at night when the solar panels are off.

“We are only using Kenya Power at night for three to four hours. That means solar power will be used for most of our 12 hours,” Mr Obado said.

He also has plans to install the solar panels at his other branches on Moi Avenue and Nkurumah Lane, Behind Kencom in Nairobi’s Central Business District.

Business effects

 

This is, however, not the first time the businessman is opting to go the solar power route.

Six years ago, when he wanted to install electricity at his rural home in Busia, he says he was slapped with a quotation of Sh800,000.

“I thought about it and wondered why I would pay such a high figure, buy a transformer which is going to be Kenya Power’s property, and still pay them every month. I settled for solar panels and it’s a decision I don’t regret,” he said.

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

According to Mr Obado, the high cost of power in Kenya has rendered businesses uncompetitive compared to other countries in East Africa.

The new Cafe Deli along Koinange Street in Nairobi, which uses solar energy.

Amina Wako | Nation Media Group

Café Deli has joined several companies, universities and factories that have turned to solar power  and, in the process, cut operational costs.

This, according to Kenya Power, has dealt a blow to their already dwindling finances.

“The company operated in a challenging environment over the financial year under review, where demand growth at 3.7 per cent remained below the projected level of five per cent. The dampened demand growth is further compounded by increased threats of grid defection by the industrial category as decentralised renewable energy options are becoming more available and cheaper,” Kenya Power revealed in its latest annual report.


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Business

GoGreenNaOptiven KAMATA 20K PAP!

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The year 2020 has stretched us in many ways! It has thrown to us numerous twists and turns, while offering us a number of highs and many lows.

But as the year ends, we would love to give you, your family and your loved ones a big smile, especially on these last days of the year with our special December offer, #GoGreenNaOptiven

With a deposit of 500k plus, you can take advantage of this incredible offer this holiday season!

With ready titles, value additions, and ready to build Environment, you can actualize your dream of property ownership.

Call us TODAY on 0723 400 500 or visit our website on www.optiven.co.ke

As Optiven, We wish you and your family a merry Christmas and prosperous New Year ahead🎄


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Business

SUKARI HEIGHTS Affordable Luxury 2 br, 3 Br plus Dsq & studio apartments

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Sukari Heights is magnificently designed luxurious and executive residence offering world class lifestyle.
Starting from Ksh 2.7M. Sukari Heights is located in the most exclusive Kahawa Sukari neighborhood just 15 minutes drive from Nairobi CBD.

The location of these homes avails a short commute to work using an easy transport network, a large choice of dining and entertainment options within easy reach, a low maintenance apartment that offers safety and security, and opportunities to immerse yourself in a socially diverse environment.

Designed to be the finest expression of world class finishes, SUKARI Heights is a rare opportunity to reside in one of the most exclusive addresses in Nairobi.

This immaculately designed apartment is set amongst manicured grounds within a private and secure complex. As a resident, you will have access to lifestyle amenities including, shopping centre, gymnasium, spa, eateries, basement parking etc.
The apartment interiors are designed for the way you live, with features that add beauty and utility to your home.
Expansive windows and balconies offer breathtaking views of the surrounding.
Bright, spacious, airy open-concept interiors flow seamlessly from living to dining to kitchen.
The unit has spacious bedrooms with well fitted built-in closets, with master ensuite bedrooms.

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

Suitable for family living as well as investment.
As an investor you will enjoy, good ROI owing to Recurring rental income, Property appreciation leading to higher resale value.

Enjoy a flexible payment plan of up to 24 months kes 1.5m deposit.
Elegant 2 br 700ft2 master ensuite kes 3.7m
Luxurious 3 br 915ft2 master ensuite kes 4.8m
Executive 3 br plus SQ 1185ft2 kes 5.7m

Features&Amenities
Supermarket
Pharmacy
Food Courts
Fitness Club/Gym
Grocery
Salon&Barbershop
Banking Services
High Speed Lifts
Back up Generator
Back up Borehole
Top Notch Security
Controlled Access
Smart parking.

To book Call/WhatsApp +254711128128
www.certifiedhomes.co.ke


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Special Offer: Own one starting at Ksh 3.7M


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