East African Cement Company on Tuesday declared redundant all its employees to trim the company’s wage bill.
The company move is aimed at cutting costs as per the turnaround strategy adopted by the board and comply with regulations placed by the State Corporations Advisory Committee.
The company’s acting managing director Stephen Nthei noted that the company was greatly affected by the Covid-19 pandemic forcing the management to restructure its operations.
“We have been restructuring to turnaround the company economically… Recently the board developed a new salary structure which is to be filed with the State Corporations Advisory Committee to ensure compliance,” Nthei said.
The acting manager said all the fired employees will get back their jobs but on a contract basis.
The move comes just after a year when the firm fired 800 employees in a move to reduce its bloated wage bill.
According to Nthei, the company’s revenue cannot meet the monthly expenditure since the domestic cement consumption has reduced by eight percent in the last three months due to the pandemic that has affected all sectors of the economy.
The cash-trapped company net loss increased to Sh1.5 billion in the six months to December 2019 from Sh1.2 billion in the same period the previous year.
Staff costs were approximately Sh4 billion in 2019 consuming up to 80 percent of the firm’s sales, which stood at Sh5 billion in 2018.
