Kenya Airways has commenced its staff rationalisation with 80 employees set to be sacked in the first phase of a redundancy plan that targets 600 employees.
KQ management says it is laying off the employees as part of cost-cutting measures it is implementing to get back to profitability. The national carrier was to commence the retrenchment in May but there was a delay in receiving Ksh10 billion from African Export-Import Bank (Afrexim) to finance the exercise.
“We issued a notice to right size through staff redundancies and redeployment on March 31 as required by law and an update was issued to staff on May 4 following intense consultations with all parties involved.”
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“During this period we have stress-tested the accuracy of our right-sizing estimates in order to ensure that we have identified all possible ways to retain staff as well as securing the airlines long term operational efficiency,” kenya Airways said in a statement signed by Chief Executive Mbuvi Ngunze
The national carrier in March announced that it intends to declare about 15 per cent of its staff complement redundant in a downsizing move that it said would reduce its payroll by about Sh2 billion annually.
KQ’s workforce stood at 3,973 as at March last year and their cost has grown by 51 per cent in the past five years to Kh16.96 billion for the year ended March 2015 compared to Sh11.2 billion in 2011.
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The airline did not offer its staff the option of applying for voluntary early retirement (VER) in an effort to put a lid on the exercise’s cost and block potential exits by key employees. “Today, we will commence with the first phase of redundancies which will impact approximately 80 staff members,” said Kenya Airways.
“We are cognizant that this is a difficult period for Kenya Airways and employee assistance will be available for affected staff at the time of the exercise and for two weeks thereafter,” the statement added.
Kenya Airways announced its biggest ever loss in 2015 of Ksh25 billion and has since been looking for ways to turnaround the business. This saw the appointment of US consultancy firm McKinsey to draw up the restructuring plan dubbed ‘operation pride’ expected to save the airline Ksh20 billion.
Kenya Airways has been operating on a negative equity position of Sh33.9 billion, further putting a strain on its operations. Last year the airline announced that it had been forced to take debt to pay its workers. KQ announced a half year loss of Sh11.9 billion and is expected to announce its full year results at the end of July.
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