Telkom to retrench 72 percent of workforce

Telkom Kenya CEO Mugo Kibati
Telkom Kenya CEO Mugo Kibati. PHOTO/COURTESY

Telkom Kenya, the country’s third largest telco in terms of market share, is set to reduce its current workforce by 72 percent for its planned merger with Airtel Kenya.

This translates to the telco offloading approximately 575 employees from its workforce that currently stands at 800 employees.

The company made the announcement in a memo to workers dated July 31 and according to the telco, which is 40 per cent owned by the government, the layoff is necessary to ensure the smooth running of operations at the firm.

“We hereby give you one month’s notice with effect from the date of this letter of our intention to terminate the employment of approximately 575 of our employees on account of redundancy as a result of the intended combination of Telkom Kenya’s mobile, enterprise and carrier services businesses with Airtel Networks Kenya,” said Telkom Kenya Chief Human Resources Offficer Catherine Olaka in the memo.

“As a consequence of the transaction, Telkom Kenya will discontinue the transferred business and must terminate the employees that are deployed to serve in these functions,” Ms. Olaka added in the memo.

The move by Telkom mirrors that of other corporates such as Stanbic Bank, National Bank of Kenya, Britam Insurance and Barclays Bank who are in the process of letting go 200, 112, 110 and 78 employees respectively to improve efficiency at the companies.

Ms. Olaka however insisted that the 575 employees will receive severance pay before they are let go by the company.

“Employees will receive terminal dues in line with their employment contracts, the collective Bargaining Agreement and Employment Regulations,” she explained.

Telkom Kenya and Airtel Kenya are currently waiting for the Communications Authority of Kenya (CA) and the Competition Authority of Kenya (CAK) to approve a proposed merger between the two firms which will culminate in the establishment of a single joint venture operating under the name Airtel-Telkom. The merger, which will combine the assets of the two telcos, is seen as a means to counter Safaricom’s dominance of the local network service provision industry.

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