Kenya Power has announced plan to fire 2,000 employees during the execution of the Voluntary Early Retirement (VER) programme as part of the restructuring exercise.
Reports indicate that Kenya Power’s board kicked off discussions on the lay off exercise in order to save money on salaries and recurrent expenditure.
The power utility firm pointed out that it estimates that the process could potentially save nearly Ksh1.54 billion annually.
The board stated that the exercise will be implemented in three phases between May and June next year at a one-off cost of nearly Ksh5.30 billion.
According to a circular by Kenya Power acting Chief Executive Officer, Rosemary Oduor, the exercise will cushion the utility firm against winding staff expenses which have been growing at a pace more than double the revenue created.
“Implementation of the Voluntary Employees Retirement exercise for 1,962 employees, which account for 20 per cent of the total workforce, will cost Ksh5.298 billion.
“The objective of this exercise is to manage the staff costs, which in the recent past have increased to unsustainable levels and bring agility to the workforce,” it added.
Kenya Power had a staff headcount of 9,843 employees as of January 2022, whom it plans to pay Ksh15.8 billion in salaries and other benefits.
The number of employees has been dropping over the recent years, dipping from a high of 11,295 in 2017, largely due to natural attrition.
Oduor, however, noted that the deterioration rate has been low and left the company with an ageing and expensive workforce.
The average employee age at the company is 46 years, which was alarming the utility firm as many of these employees approach retirement.
“At an average age of 46 years for permanent employees, the company will be in crisis in the next 10 years,” Oduor stated.