Sameer Africa to lay off 52 employees to cut on operational costs
By Derek Otieno, January 7, 2020
Sameer Africa will send home 52 employees next month to cut on operational costs, acting chief executive Peter Gitonga said yesterday.
Gitonga told Business Hub the prevailing economic conditions have forced them to take the drastic action.
“It is regrettable that we have to send some of our employees home. It is the current business environment that has pushed us this far.
We have had a bad year and there is no other way we can sustain our operations without restructuring and laying off staff. We have already informed the Ministry of Labour and the Nairobi Labour office of the same,” said Gitonga.
“It has been a bad year for us as a company. The best decision was made to keep the company going. It has been tough on the business front,” he added.
Tyre market
The company has struggled in the recent past following an influx of imports over the last decade, losing the stranglehold they had in the tyre market.
In a letter addressed to the Nairobi County Labour Office, Gitonga said various tyre centres and offices across the country would also be closed.
Gitonga added that the process will be done in batches from February until April.
This follows continuous struggles that the company has undergone since its change of strategy in 2016 where it stopped manufacturing Yana Tyres locally and opted to outsource from the Far East.
“Arising from the foregoing, the board of directors has resolved to restructure the company further by aligning the company operations to become more of a trading and distributorship outfit,” said Gitonga
Shrinking workforce
He added: “It is therefore contemplated that approximately 52 employees drawn from both management and unionisable cadres will have their employment contracts terminated.”
According to company’s profile, the staff head count has been declining since 2016, with the number of workers shrinking to 168 in 2018 from 288 in 2017.
Its net loss was also widened 15.8 times to Sh182.8 million within the first six months of 2019.