Motor vehicle distributor Simba Corporation (Simba Corp) has announced plans to lay off majority of its 1,500 workers, highlighting a growing trend by firms to retrench employees in an effort to cut down on operational costs.
According to the Business Daily, despite not revealing the exact number of workers that it will retrench, Simba Corp has cited the country’s tough operating environment as the reason behind the decision.
“I don’t see myself having more than five percent of employees attached to this group,” Simba Corp Chief Executive Dinesh Kotecha told the Business Daily.
Simba Corp similarly revealed in the Business Daily report that it is working with heads of departments to confirm the positions that will become redundant from the identified areas at risk.
Simba Corp has become the latest corporate to announce plans to lay off workers in an effort to cut down on spending expenses.
In June, cement manufacturer East African Portland Cement (EAPC) announced plans to lay off 220 employees in an effort to reduce its payroll. To that effect, the company retrenched 27 percent of its 821 employees by September. In August, Telkom Kenya relieved approximately 72 percent of its workers from duty, translating to 575 employees, ahead of its planned merger with Airtel Kenya.
Earlier this month, troubled sugar miller Mumias Sugar, now under KCB receivership, terminated the contracts of all employees working at struggling miller Mumias Sugar in line with its efforts to restructure the failing business.
According to PVR Rao, the millers’ receiver manager, the employee contracts become null and void effective September 20, when the sugar miller was placed under KCB receivership after defaulting on loans amounting to Ksh. 12.5 billion.
“Consequent to the company being placed under receivership all employees contracts stand terminated from the date of receivership,” Mr. Rao said in a letter addressed to the employees notifying them about the lay-offs.