Unga Group is planning to lay-off at least 50 employees in a strategy expected to help the company navigate the harsh economic environment.
- •Like many companies, Unga Holdings has been facing challenges occasioned by the tough economic times in the country.
- •The company says, its volumes and margins are down with the sales, particularly of for the Unga Limited business being below budget consistently, resulting in low-capacity utilization and high fixed costs that are no longer sustainable.
- •CIC Insurance Group Plc, a leading insurance firm listed at the Nairobi Securities Exchange (NSE), has also announced a staff rationalization program that will see it reduce its workforce by 75 employees out of a total of 728 across its four companies.
“Currently the biggest challenge for many organisations is to remain financially viable from both profitability and more importantly, cash flow perspective: Unga is no exception. We have worked on several initiatives to bring our costs in-line with anticipated business performance but, despite this, it has become apparent that we also need to restructure our organization. This will result in job loss,” said Joseph Choge, Group Managing Director.
“We are actively continuing to explore alternatives to compulsory redundancies and, if this proves unavoidable, we will minimize the number of employees affected. Our current assessment of the situation suggests that we are anticipating compulsory redundancies affecting a maximum of 50 employees.”
- •According to Patrick Nyaga, CIC Insurance Group CEO, the rationalization involves a Voluntary Early Retirement Programme that encourages staff at different levels to apply with a benefit package on offer.
- •CIC said the new structure is aimed at optimizing vital capabilities, eliminating functional and resource duplication, driving cost efficiencies, simplifying and removing organisational complexities.
- •This follows the completion of a review of its detailed organizational design which culminated in the adoption of a leaner, flatter, and more transparent organizational structure.
Due to the challenging economic conditions that have led to declining consumer purchasing power, Twiga Foods, also in the year revealed a fresh wave of layoffs affecting its workforce.
In its official announcement, Twiga Foods stated that it has been actively undergoing a transformational journey to streamline its operations, enhance agility, and optimize costs. These measures, it said are aimed at ensuring the company’s resilience in the face of the ongoing economic difficulties.
“As part of these efficiency measures, the company conducted a thorough review of its operational framework and expenditure to align its organizational structure with its objectives. Regrettably, this evaluation has led to the identification of certain redundant roles across the organization. The company has executed this process while strictly adhering to relevant labour laws. Additionally, the review necessitated adjustments to the organizational structure across various regions,” the company said.
The lay-off plans come as a number of companies issue profit warning projecting net-earnings for the current financial year to decline by atleast 25 per cent. They are Sameer, WPP Scan Group, Sasini, Nation Media Group, Car and General.
According to analysts, the Kenya shilling’s exchange rate depreciation against the US dollar and a tough business environment have continued to drive more listed firms, especially those that rely on imported raw materials, to issue profit alerts.
Weak shilling trigger profit warnings from listed firms (kenyanwallstreet.com)