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UAP-Old Mutual lays off 100 over tough business environment

By Dominic Omondi | February 9th 2017

UAP-Old Mutual Group CEO Peter Mwangi. [Photo: Wilberforce Okwiri/Standard]

Financial services firm UAP-Old Mutual Group is the latest in a string of companies that have sent employees home to navigate a stormy business environment.

The insurance company will lay off close to 100 workers in a process that will involve redeployment and redundancies. The company said in a statement that early in the year they began organisational restructuring, which would necessitate a staff re-organisation in Kenya. Unfortunately, the statement went on, the process will “involve some staff re-deployments across the various business units as well as a limited number of redundancies.”

“We regret the inevitable impact on our employees. While this kind of restructure is never an easy process to manage, we are committed to applying our organisation’s values of respect and accountability, and will ensure to comply fully with the relevant labour laws,” said UAP Old Mutual Group CEO Peter Mwangi.

Under one roof

In a memo sent to employees on January 27, 2017, Mwangi said, “You will recall that during the town-hall meeting held at UAP Old Mutual Tower on 29th November, 2016, I indicated that we were in the process of conducting a review of our current organisational structures within Kenya with a view of determining whether they are adequate in ensuring optimum performance and business efficiency.”

In the memo, he said the total number of roles across the Kenyan business that would be adversely affected by the process would not exceed 100. The process, which began this month, is expected to end in the second week of March 2017.

This restructuring exercise does not impact the group’s businesses in Uganda, Tanzania, South Sudan, Rwanda and the DRC. The company is also planning to put under one roof all its businesses including banking, insurance and investment services.

It has not been the best of times for businesses in the country. In 2016, more than 10,000 employees are feared to have lost their jobs as employers grappled with a tough business environment. Over 20 companies, including a host of banks and manufacturers, have laid off thousands of employees, leaving families across the country without a source of income.

Although Kenya Airways has so far sent home only 80 employees, it plans to lay off 600 others in its second phase of retrenchment, making it the biggest job-cutter this year.

Firms that laid off in 2016 include Standard Chartered Bank (300), Equity Bank (400), Sidian Bank (108), NIC Bank (32). Family Bank and First Community are yet to disclose how many they retrenched. Others are Telkom Kenya (500), Flower farm Karuturi (2,600), Kenya Meat Commission (118), Airtel (more than 100), Sameer Africa (600), Portland Cement (1,000), and Uchumi (253). Also, Kenya Flouspar Company shut its operations and sent home about 700 workers.

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