Layoffs loom as coffee chain Java asks staff to resign

Coffee chain Java House has asked scores of staff to “voluntarily resign” in a fresh wave of cost cutting measures.

This comes after April’s slashing of 40 per cent of staff salaries in a bid to ride out the economic impact of Covid-19.

The restaurant chain told the hundreds of employees that it had run out of ideas even after reviewing “every aspect” of cost reduction, including rent relief and cutting utility costs.

Java House, which operates over 80 outlets across East Africa, noted that the pandemic’s impact on the food and beverage business was not abating any time soon even after restrictions were eased.

“During the last few months, we have looked at every aspect of cost reduction in the business, including re-negotiating rents, our procurement of raw material, our labour schedules and our utility costs and these are now moving towards a very low level in line with expected sales.

“But unfortunately, the business is potentially over resourced at the current level of performance,” the company said in the resignation forms it distributed to workers.

The forms contain the Voluntary Separation Option programme, which Java describes as giving “eligible employees an incentivised option to willingly resign from the company” by November 27.

“Java has had to make a difficult decision to offer the programme to provide our staff the opportunity to receive a lump sum financial payment from the company, allowing them to create options for themselves following the prolonged effects of Covid-19,” said the firm.

“It is also a way in which we can offer an alternative to those unable to work or on rotation to allow them pursue other interests.”

In March, Java temporarily closed 14 of its shops as foot traffic dropped.