Cash-strapped East African Portland Cement Company (EAPCC) will do away with all permanent jobs and only hire employees on contract terms in a drive to slash its wage bill.
In an updated notice on the company’s restructuring staff rationalisation programme, Acting Managing Director Stephen Nthei says all jobs will be reviewed and employees are allowed to reapply, but only on contract terms.
“At the end of the process, the current employees will apply for newly configured jobs as will be defined in the new structure on a contractual basis,” read a press statement from EAPC.
“This will reflect a performance-based appraisal system as the company crystallises on a plan to operate with not more than 600 persons. We highly regret the impact this will have on affected employees.”
The State-owned firm, with about 800 employees split into permanent and contractual terms, will terminate all existing job agreements in phases as it moves to cut costs.
In the financial year ended June 2018, the firm spent Sh3.04 billion to pay 936 employees, a 96 percent jump from Sh1.56 billion spent on 1,265 employees the previous year.
Mr Nthei had last week told the Business Daily that the current total cost is very high compared to the firm’s productivity.
The EAPC had been moving towards contract jobs but that has done little to cut on costs.
The cement maker had 936 employees at the end of June 2018 — split as 448 on a permanent basis and 488 on contract.
Headcount has since dropped to about 800 with Mr Nthei saying of the employees on a contract, only about 25 people will still be with running contracts come the end of December 2019.
This will help keep the company’s restructuring costs at the estimated Sh600 million.