Airtel lays off 60 but dispels fears of exit

Operator merges departments and is said to be planning further changes in a restructuring process.

Sunday January 17 2016

Safaricom chief executive officer Bob Collymore (R) with Airtel Kenya managing director Adil El Youssefi (left) during the 2014 Tax Payers Week awards on October 21, 2014. Airtel Kenya has retrenched 60 employees in a restructuring process that was announced on Friday. FILE PHOTO | DIANA NGILA | NATION MEDIA GROUP

Safaricom Chief Executive Officer Bob Collymore (right) with Airtel Kenya Managing Director Adil El Youssefi during the 2014 in Nairobi on October 21, 2014. Airtel Kenya has retrenched 60 employees in a restructuring process that was announced on Friday. FILE PHOTO | DIANA NGILA | NATION MEDIA GROUP 

By LILIAN OCHIENG'
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Airtel Kenya has retrenched 60 employees in a restructuring process that was announced on Friday.    

The operator is merging some of its departments and is said to be planning further changes later this year.

“The exercise, which is focused on aligning the company’s structure with its operating model, also entailed a right-sizing that impacted 60 members of our current workforce,” said Airtel Kenya CEO Adil El Youssefi in a statement on Friday evening.

“One of the key objectives is to create a high performing firm, which satisfies the needs of all of our stakeholders, especially our customers, as we step into the next growth phase.”

"SENSITIVE TOWARDS STAFF"

The CEO said the company “is sensitive towards the affected staff” to minimise the impact on them and had contracted a reputable organisation to offer job-search services and provide training to assist them find new opportunities.

“Also, the company is compensating them above what is prescribed by the prevailing laws,” he said.

(READ: Airtel to invest Sh19bn in network upgrade)

Mr El Youssefi, however, denied rumours of a possible exit from Kenya. “Airtel remains committed to the Kenyan market, with significant investments of over Sh20 billion,” he said.

The telcom company has been struggling in the local market amid stiff competition from its rival Safaricom.

Weak currency markets are also to blame for the cut in its earnings.

“We have been trying for over five years and have not made one dollar in profit.

LIKELY EXIT

"Airtel is likely to exit Kenya if the market structure is not addressed in terms of dominance,” said Mr Youssefi in an interview last September.

Airtel has also aggressively pushed for regulations governing dominance in the sector.

This, the operator forecast, would clip M-Pesa’s operations and allow Airtel to take advantage of the space to increase usage of its Airtel Money services.

But a Bill signed by President Uhuru Kenyatta in December (Miscellaneous Amendments Bill 2015), took away the Communications Authority’s powers to regulate dominance, passing them to the Competition Authority of Kenya.

This was a major blow to Airtel, closing the discussion on dominance and restricting the subject to already existing regulations on the Competitions Act.

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