Zain Africa to outsource, lays off 141 in Kenya

Zain Africa CEO Chris Gabriel (right) and Zain Kenya managing director Rene Meza at a press conference. The mobile phone company announced the reduction by 20 per cent of its employees in a bid to cut costs. The move comes in the face of the current global financial crisis. Photo/PHOEBE OKALL

What you need to know:

  • Zain to outsource some functions, eyes acquisitions
  • Lays off 141 workers in Kenya
  • Says 2009 Africa capex $1-2 billion

Kuwaiti mobile firm Zain will cut 141 jobs in Kenya as part of a pre-planned restructuring it hopes will help it weather the global economic downturn, its Africa chief executive officer said on Monday.

Chris Gabriel said the operator was introducing a new business model, first rolled out in Saudi Arabia in 2007, and outsourcing some functions.

"It will enhance and assist our position as we navigate through the crisis," Gabriel said, adding that the timing of the implementation had been planned before the financial crisis.

Gabriel said it was too early to work out what the programme would cost or save Zain. Gabriel added that studies would be carried out in other countries where Zain works to determine whether more job cuts were required.

"Kenya is the first and we are looking at all the operations progressively," he said.

Majority-owned by Kuwait's sovereign wealth fund, the telecoms company aims to be a top 10 global operator with 110 million customers by 2011.

But in Kenya Zain has lagged behind chief competitor Safaricom with about 3 million subscribers compared with Safaricom's 13.3 million, which represents a 77 per cent market share.

Gabriel said services to be outsourced include network building, operations and information technology systems.

He said Zain planned to spend $1-$2 billion on its 16 operations in Africa, adding that they were constantly looking for new acquisitions.

"We still see Africa as the growth market of the world. We see continuous opportunities," Gabriel told reporters, citing the continent's low rate of mobile phone usage, which is estimated at about 30 per cent of the population.