Nairobi News

Hustle

Troubled Tuskys sends hundreds of staff home as layoffs continue


Troubled retailer Tuskys Supermarket on Monday sent home hundreds of their unionised staff across the country as it struggles to stay afloat.

The supermarket chain says the fresh layoffs are part of its ongoing business operation realignments.

In a letter seen by Nairobi News and addressed to the affected employees, the retailer said the terminal dues of those affected will however be paid out on February 13, 2021.

In the letter, the retailer’s Human Resources General Manager, Francis Kimani, added that it will only offer payment to the staff members in line with the termination notice including accrued leave days and severance pay.

“Due to the ongoing business realignments, Tusker Mattresses Limited hereby informs you that it will no longer continue to offer you employment and will terminate your employment contract with effect from September 22,” the letter reads in part.

One of the affected employee, who sought anonymity, told Nairobi News that the fresh layoffs targeted unionised staff who were recently embroiled in a salaries reduction battle.

Tuskys had on April 28, 2020, through a letter, informed the Kenya Union of Commercial Food and Allied Workers that it was in the process of reducing working hours from 45 to 36 hours per week and invited the union to a meeting on April 30.

The retailer had informed the union that salaries for staff earning Sh49,999 and below had been reduced by 20 per cent, 25 per cent cut for those earning Sh50,000 to Sh99,000 and 30 per cent cut on salaries above Sh100,000. The salary reduction was effective April 2020.

The retailer argued that the effect of Covid-19 on its business, including containment measures by the government such as curfew, had impacted negatively on its business.

Last week, former employees who were recently laid off by troubled retailer, held demonstrations in Nairobi’s city centre to demand their dues.

More than 45 former employees who had been hired on contract accused the former largest retailer in the country, of giving them the runaround for the last three months.

STRUGGLING RETAILER

Stephen Owiti, who organised the demo, said some ex-employees had been given post-dated cheques which they doubt will be honoured.

“Some of us have post-dated cheques which we were told to cash at the end of the month, while others have cheques which have not been signed. How can you bank a cheque which is not signed?” he wondered.

A majority of those who have been retrenched are non-unionised employees and say they have gone for months without pay.

On Monday, auctioneers temporarily suspended sale of Tuskys Supermarket stocks at Nairobi’s Greenspan Mall over Sh24 million rent arrears, offering a sigh of relief to the struggling retailer.

Sannex Auctioneers said Tuskys has entered into a deal with Greenspan Mall proprietor to put on hold plans to auction its goods over rent arrears and a consent has been filed in court to compel the retailer to clear the debt in two weeks.

The auctioneers had given the retailer a seven-day notice starting September 14 to pay the outstanding rent arrears or have its goods sold through public auction on September 22.

Tuskys goods that were set for auction include electronics, assorted clothes and handbags, freezers, trolleys, phones among other items.

“The auction has been put off to allow Tuskys time to pay. Today, they went to file consent so that they can be given two weeks to comply,” said a representative from Sannex Auctioneers.

“The total amount that was due in rent arrears by the retailer at Greenspan Mall was Sh41 million. As at yesterday, they had paid Sh17 million.”

CASH FLOW CRISIS

Tuskys Wareng in Eldoret is also due to be auctioned on October 7, 2020, over accumulated rent arrears.

Through a notice by Jomuki Auctioneers, the supermarket chain properties are set to be auctioned in a public auction.

“Under instructions received from our client, we shall sell the following by Public Auction: On Wednesday, October 2020 outside Tuskys Supermarket Wareng Premises in Eldoret town of Uasin Gishu County, starting from 11.30 am,” read the notice published in the local dailies.

The former giant retailer is currently in deep cash flow crisis and is seeking to raise funds, including debt and sale of stake to equity investor, to clear loans and supplier dues.

The struggling retailer is set to raise Sh2 billion short-term debt from an unnamed private equity firm based in Mauritius, with the funds aimed at stabilising operations to make it more attractive to strategic investors it is courting.

On Friday, Chief Executive Dan Githua said the disbursed first tranche of Sh500 million will cover immediate working capital requirements including partial settlements to staff, suppliers and landlords among others.

“Having received the funds, we are actively releasing due payments to landlords, staff, and suppliers. In particular, the first tranche of the suppliers’ old debt amounting to Sh321 million has been settled,” Githua said in a statement on Friday evening.

Tuskys, which had staff base of over 6,000 employees, joins an increasing number of companies which, responding to policy changes and a tough business environment, have recently laid off staff in an effort to remain afloat.