East African Portland Cement is in the process of laying off its entire workforce of roughly 800 employees in an attempt to cut operating costs. The company will then rehire about 600 workers under new terms of service which include a 60 percent reduction in the monthly pay.
According to Stephen Nthei, the firm’s acting Managing Director, the staff costs outweigh the level of productivity hence the need to reduce the employee expenses. EA Portland Cement Company incurs KSh8 million loss daily. In the last financial year, the firm posted KSh3.6 billion in operating losses.
The cement sector in Kenya has suffered a decline due to the slowdown in the construction and real estate industry. All three listed cement companies; ARM Cement, EA Portland Cement, and Bamburi Cement posted weak financial results in 2018.
A memo to the company’s employees read, “All positions will be declared redundant and the employees released. Subsequently, all jobs will be reconfigured in terms of jobs consolidation and enrichment in line with restructured and leaner organizational structure.”
The company said that restructuring was a difficult decision to make but the best in the interest of the cement producer. All workers will get their dues at the time of leaving the company.
The tough economic environment in Kenya has seen many business layoff their workers in large numbers. EABL, Telkom Kenya, Stanbic Bank, and Portland cement are a few of the companies that have announced massive layoffs in the past one week.
Related:
East African Portland Cement Issues profit warning
East African Portland Cement board fires CEO
