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Anxiety as Zuku plans to retrench 300

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The evaporation of media jobs continues, with the latest to go being employees at Zuku. Wananchi Group Holdings, owners of pay-TV and internet provider Zuku, has issued a layoff notice to its workers.

The layoffs come as a result of a planned merger of businesses due to slow growth of the company’s struggling satellite TV business in a stiff market dominated DStv and its half-sister, Gotv.

Wananchi has an estimated 1,000 employees and sources say over 30% are likely to be laid off beginning June this year, which translates to about 300 people. The company is working on merging the satellite TV business with the triple-play Zuku service as a way to keep its operational costs down.

The merger plan was reached by company’s board which met on 19th February 2017 and resolved to re-integrate the cable and direct-to-home businesses.

“Resulting from this re-integration and alignment to the requisite reporting structure we regret to inform you that a number of positions in the organisation will fall off,” Mr Dismas Omondi, director of human resources at Wananchi Group, said in a notice to staff.

Currently, there is tension and anxiety across the company as managers identify the positions and staff that will be affected.

See Also: BBC’s new studio creates 250 jobs in Kenya

Those to be retrenched will receive severance pay calculated at 15 days for each year worked, ex-gratia pay of one month for every year worked, accrued leave days untaken, and terminal benefits from the company’s pension scheme.

The satellite TV business has been struggling to gain traction in Kenya. The payTV market is controlled by Multichoice – which owns DStv brand and co-owns Gotv with KBC – leaving other players with a tiny fraction of the market. Multichoice brands have been boosted largely by its exclusive rights to air the English Premier League, a popular sport in Kenya.

The other big player in the market is StarTimes which has captured substantial market share on the digital TV platform.

While the Zuku product is mostly popular for its broadband package, which comes bundled with pay-TV, and internet telephony, it’s programing has not struck a chord to force customers to dump DStv.

Even as it plans to fire staff,  Wananchi is also smarting from a shareholder revolt that has forced its majority owner, the Overseas Private Investment Corporation), an American government-backed PE firm, to intervene.

Wananchi’s financial health nosedived this year when 80 founding shareholders went to court to block the sale of the corporate data arm. Some of the company’s founders include ICT Secretary Joe Mucheru and founder CEO Njeri Rionge.

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BT Correspondent
BT Correspondenthttp://www.businesstoday.co.ke
editor [at] businesstoday.co.ke
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