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Tough times as Airtel sends home 100 staff

Airtel Kenya has sent home 100 employees marking the company’s second such layoff in a year and pointing to the firm’s increased efforts to reduce its operating costs.

The telco, which is ranked second in terms of subscriber numbers after Safaricom, issued redundancy letters to affected staff at its Westlands headquarters on Friday.

The staff were to immediately clear with the relevant departments.

Exactly a year ago, Airtel sent home 60 employees in a restructuring which saw some departments merged.

The subsidiary of Indian conglomerate Bharti Airtel says the latest round of layoffs has been implemented for similar reasons.

“Airtel Kenya is undertaking strategic organizational restructuring to improve efficiency across functions with an aim to enhance customer experience,” the company said in a statement.

“This initiative will impact some roles that will be merged or become redundant. The company will compensate the employees over and above what is prescribed as per the prevailing laws.”

Affected staff were sent on one-month paid leave beginning yesterday, a redundancy letter seen by the Daily Nation indicates.

SEVERANCE PAY

The employees will receive their salaries and allowances up to February 13, accrued annual leave days, one month’s notice pay, an ex-gratia equivalent of a month’s salary and severance pay equivalent to 15 days for every year served.

Industry data from the Communications Authority of Kenya (CA) shows that, as of June, Airtel had a market share of 16.6 per cent with 6.5 million subscribers on its network.

This marked a decline of 200,000 customers in the three months to June.

Listed firm Safaricom, the country’s top telecom firm with 65.2 per cent market share, saw its customers grow 3.1 per cent during the period under review to 25.9 millio subscribers.

Airtel has struggled to make inroads locally since 2010 when Bharti Airtel entered the Kenyan market by buying out Zain.

In recent years, Airtel’s management has been aggressively been pushing to have Safaricom declared dominant.

SAFARICOM’S DOMINANCE

In September 2015, the firm’s chief executive Adil El Youssefi even threatened that Airtel could exit the country if new regulations are not passed to curb Safaricom’s dominance.

“We have been trying for over five years and have not made one dollar in profit. Airtel is likely to exit Kenya if the market structure is not addressed in terms of dominance,” he said.

“The shareholders of Airtel at some point will say: ‘Thank you, Kenya, we are no longer investing here’.”

Bharti Airtel has found it tough to crack the African market, forcing the firm, which is owned by India’s business mogul Sunnil Bharti Mittal, to divest from some loss-making countries.

In the half-year to September, the company was able to reduce the losses from its African operation to $91 million compared to $170 million which it posted during a similar period in 2015.

This narrowing of losses resulted from divestment of units (Burkina Faso and Sierra Leone) and sale of tower assets.