Scangroup lays off 102 employees in latest restructuring move


WPP Scangroup staff at a past meeting. 

Photo credit: Courtesy of Scangroup

Listed marketing services firm WPP Scangroup laid off 102 employees in the year ended December as it continued to focus on cutting costs.

This saw the company’s workforce—comprising permanent and contract staff—fall to 452 in the review period from 554 a year earlier.
Scangroup says it implemented most of the job cuts in May 2023.

“In 2023, we continued to progress towards our goal of building a future fit organisation by streamlining the workforce and investing in new talent and skills. We exited 15 percent of the workforce via redundancy in May as a result of the exercise,” Scangroup says in its latest annual report.

Of the 102 employees that were fired, 86 were contract workers and 16 were permanent staff. The latest job cuts add to the 157 employees it laid off in 2020 when the Covid-19 pandemic disrupted the business landscape.

Marketing services firms are among the companies that have cut jobs in a tough operating environment.

E-commerce firm Copia Kenya recently went into administration, putting up to 1,060 jobs on the line.

The company had earlier announced that an undisclosed number of employees would exit the organisation in a shakeup directed towards a more technology-focused firm.

“We continued to progress towards our goal of building a future-fit organisation by streamlining the workforce and investing in new talent and skills,” said Scangroup.

The company’s total staff costs rose 7.88 percent from Sh1.8 billion to Sh2.01 billion in the year under review.

Salaries and wages grew from Sh1.5 billion to Sh1.7 billion.

During the year revenue fell from Sh7.3 billion to Sh6.6 billion while direct costs shrunk from Sh5.1 billion to Sh4.4 billion.

The firm reported a net profit of Sh130 million in the review period, reversing a net loss of Sh145.5 million a year earlier.

The return to profitability was helped by release of funds that were tied up in connection with an earlier disposal of a subsidiary.

"The group completed the sale of its interest in Kantar operations on 30 June 2020. The share purchase agreement included a provision for deferred consideration of $1,520,000 (Sh238,248,000) that was withheld in 2020 by the buyer of Kantar business due to some litigation against the sub-group that was being disposed of," Scangroup said.

"This deferred consideration was released to the Company during the current financial year."

Scangroup provides advertising, market research and public relations services to companies but has seen sales decline as these clients cut their marketing budgets.

Scangroup plans to sell its business in South Africa, winding up several subsidiaries months after it sold its operations in Nigeria.

The company has registered entities in operations in other countries including Ghana, Rwanda, Malawi, Uganda, Gabon, Mozambique, Mauritius and Zambia.

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