Loss-making power distributor, Kenya Power and Lighting Company (KPLC), is set to reduce its workforce by 20 per cent as it struggles to return to profitability.
In the latest cost-cutting retirement plan, it projects it will spend KSh 5.3 billion. The plan will affect 1,962 ageing workers and replace them with 830 youthful and energetic ones.
“Implementation of the Voluntary Employees Retirement exercise for 1,962 employees, which account for 20 per cent of the total workforce, will cost Ksh5.298 billion. The objective of this exercise is to manage the staff costs, which in the recent past have increased to unsustainable levels and bring agility to the workforce,” Kenya Power acting Chief Executive Officer, Rosemary Oduor said in a circular.
The programme will be implemented between May and June 2023 and will see the current Kenya Power employee count of 9,843 fall to 8,711 at a one-off cost of Ksh 5.3 billion.
As a result, it will help cut its Ksh 15.8 billion annual wage bill, which has been growing at an average of 12 per cent in the five years to the end of 2020, compared with average revenue growth of 5.4 per cent over the same period, the circular said.
“In an environment where low operational costs and agility are critical requirements, productivity and quality of service have been negatively impacted,” Oduor noted.
“This calls for the company to put in place a human capital focused on a business sustainability plan that will enhance effective customer engagement, manage staff costs and infuse agility while at the same time managing knowledge transfer.”
According to the listed utility company’s Annual Report and Financial Statements 30 June 2021, underpinning the turnaround strategy into a high performance, and results-oriented organization, they deployed a robust performance management framework anchored on results, and supported it with a culture change programme.
“We also undertook a review of our Human Resource instruments, in collaboration with the State Corporations Advisory Committee (SCAC), and we will be rolling out an enhanced staff structure within FY2021/2022.”
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