Kenya Power Lays off 522 Workers in Cost-cutting Plan

Kenya Power laid off 522 workers in the financial year to June last year amid restructuring targeting costs.

The job cuts left the utility firm with 9,655 workers in June last year, a 5.1 percent reduction of its workforce from a headcount of 10,177 in June 2021, according to a company disclosure.

It is the largest annual round of lay-offs in more than four years at the company which has gradually reduced its employee count from 10,993 in June 2018.

The power distributor’s salaries and wages budget, however, rose marginally to Sh4.82 billion in the year to June last year compared to Sh4.71 billion in the previous year.

Kenya Power has been under pressure to rationalise its huge staff numbers to cut costs and introduce a shift system to maximise performance.

The task force on the review of power purchase agreements (PPAs) appointed by then President Uhuru Kenyatta in 2021 recommended the firm vet staff, focusing on qualifications, competencies and integrity.

The John Ngumi-led task force also recommended that the utility outsource experts across the globe to “enhance specialised skills within the company, such as structuring and negotiation of international transactions, financial modelling, Treasury operations, new innovations, and talent management”.

The job cuts also come at a time the company is hiring workers on short-term deals to longer contracts amid pressure by unions including the Central Organisation of Trade Unions (COTU) to give contract employees permanent jobs.

“The long-awaited onboarding of technical staff on short-term contracts to long-term contracts commenced in the period and is nearing completion. This will pave the way for the next phase covering staff in other professional categories,” said Kenya Power.

The firm has been struggling with its huge wage bill, and in February last year announced plans to let go 1,962 of its workers in a voluntary employee separation. The three-phase exercise, which covers the period to June this year, is expected to cost the company Sh5.3 billion.

It said the layoffs targeted older employees who would be replaced with younger staff, eyeing Sh1.54 billion annual savings.

Union workers under the Kenya Electrical Traders and Allied Workers Union, however, threatened to down tools over the job cuts even as it called for improved terms for workers.