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Airtel’s second layoff in a year turns focus on turnaround bid

Airtel Kenya CEO Adil El Youssefi. PHOTO | FILE
Airtel Kenya CEO Adil El Youssefi. PHOTO | FILE 

Airtel Kenya’s announcement of the second staff retrenchment within one year has raised questions on the firm’s ability to mount a challenge on market leader Safaricom.

The telecommunications firm on Friday sent home 100 of its staff, in what it termed a “strategic organisational restructuring to improve efficiency across function.”

The latest redundancy adds to the 60 others that the telco let go in January 2016.

Airtel, which is ranked as Kenya’s second-biggest mobile operator by subscriber numbers after Safaricom, has in the past stated that it has not made “a single dollar in profit” since its parent company, India’s Bharti Airtel, took over Zain in 2010.

“Airtel Kenya is undertaking strategic organisational restructuring to improve efficiency across functions with an aim to enhance customer experience,” Airtel Kenya said in a statement.

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“This initiative will impact some roles that will be merged or become redundant.”

Affected staff were sent on one month paid leave, a redundancy letter seen by the Business Daily indicated. They will receive their salaries and allowances up to February 13, accrued annual leave days, one month’s notice pay, an ex-gratia equivalent of a month’s salary and severance pay equivalent to 15 days for every year served.

Industry data from the Communications Authority of Kenya shows that as of June, Airtel had a market share of 16.6 per cent with 6.5 million subscribers on its network.

This marked a decline of 200,000 customers in three months. Safaricom ranked top with a 65.2 per cent market share as its customers in the period grew 3.1 per cent to 25.9 million.

Bharti Airtel has struggled to crack the African market, forcing the firm to divest from some loss-making countries such as Burkina Faso and Sierra Leone.

Such divestments and sale of tower assets saw the firm, in the half-year to September, reduce the losses from African operation to $91 million compared to $170 million during a similar period in 2015.

Airtel Kenya’s management has been aggressively been pushing to have Safaricom declared dominant. The firm had even threatened to exit the country if regulations are not passed to check Safaricom’s dominance.

“We have been trying for over five years and have not made one dollar in profit. Airtel is likely to exit Kenya if the market structure is not addressed in terms of dominance,” chief executive Adil El Youssefi said in September 2015.

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