Kenya’s power utility company has hinted at a major cost-cutting measure that would see about 2000 of its staff being laid off.
The company says it is implementing what it described as voluntary employee retirement (VER).
This plan is expected to save Kenya Power some Sh.1.54 billion.
The exercise will trim about 20 per cent of the entire workforce and would be carried out in three phases between May and June 2023 at a one-off cost of nearly Sh. 5.30 billion.
Once these employees are sent home, the national power provider will hire a fresh 830 younger, agile workforce at a cheaper cost.
Kenya Power estimates the cost of layoff and hiring new staff at Sh. 6.26 billion.
This will be funded in three equal phases in May, January 2023 and June 2023.
“The company, because of low attrition rate, has an ageing and expensive workforce resulting in staff cost growing at nearly twice the rate of revenue growth,” Acting Chief Executive Officer, Engineer Rosemary Oduor said as reported by the Kenyan media.
“In an environment where low operational costs and agility are critical requirements, productivity and quality of service have been negatively impacted.”
She added that “this calls for the company to put in place a human capital focused on a business sustainability plan that will enhance effective customer engagement, manage staff costs and infuse agility while at the same time managing knowledge transfer.”
According to Engineer Oduor, a majority of the 1,962 staff targeted in the upcoming sackings are artisans (571), technicians (180), engineers (155), clerks (151), drivers (138), craftsmen (131), commercial services officers (122), and meter readers (110).