Kenya Airways sends 38 employees home
Posted Tuesday, January 10 2017 at 12:59
Kenya Airways has laid off 38 employees in its second phase of restructuring as the airline continues to implement its turnaround strategy.
The retrenchment is expected to affect at least 600 workers as the struggling Kenyan national carrier seeks to ease pressure on its wage bill, and turn to profitability.
The downsizing will cost the airline about $100 million, which it borrowed from the African Export-Import Bank (Afrexim).
KQ sent home 80 staff members in its first phase carried out in July last year.
“After implementation of Phase 1 of the restructuring process, we continued looking for opportunities for productivity and efficiency gains as well as upskilling within the business,” KQ chief executive Mbuvi Ngunze said in a statement on Tuesday.
“After a lot of consultation the next phase of the process is now ready to be rolled out. There is never a perfect timing for such actions, and we will ensure that the process is handled within the values of our airline,” he added.
Last March, the airline announced that it intended to downsize its staff by about 15 per cent in a move it said would see it save $20 million (Ksh2 billion) annually off its payroll.
According to KQ’s annual report, its workforce stood at 3,870 as at March last year and their cost has grown by 40.1 per cent in the past six years to Ksh15.7 billion ($160 million) compared to Ksh11.2 billion ($110 million) in 2011.
Mr Mbuvi, however, did not disclose how much the airline has saved from the restructuring process so far.
The airline reported a net loss of $262 million (Ksh26.2 billion) in its full year to March 2016, widening the $257 million net loss of 2015. KQ has been reporting losses since 2010.