Oil marketer Ola Energy (formerly OiLibya) has announced that it will lay off workers in a voluntary early retirement exercise as part of its turnaround strategy.
In the announcement made Tuesday, Ola Energy Kenya General Manager Millicent Onyonyi confirmed the layoffs but did not disclose how many staff would be affected.
“We are not targeting a specific number of staff. It is based on the applications (for voluntary early retirement),” she said.
She said in a statement, the voluntary early retirement plan offers a severance pay equivalent to one-month for every completed service capped to 20 months, one month salary in lieu of notice, one month salary as a gift, one month salary compensation for resettlement, medical cover to the end of the year and an opportunity for the employee to share pension allowed by the law if they so desire.
Ola Energy, which rebranded from OiLibya last year, is the local subsidiary of Tamoil Africa Holdings Limited. The oil marketer has 189 staff locally.
Sources had earlier told the Business Daily retail petrol stations re-branded to Ola Energy have experienced significant drops with a corresponding loss in market shares.
Ola Energy, the source said, had threatened to remove dealers that lost sales after the re-branding.
Ms Onyonyi defended plans to send home some workers, saying it was necessary to make the oil marketer agile.
She blamed a raft of new levies including the 10 per cent import duty charged against raw materials for the manufacture of lubricants and those newly imposed by county administrations saying this had stifled the oil marketer’s business.
She made the comments during a briefing attended by Ola Energy global Chief Executive Mazin Binramadan and other top Dubai-based officials of the oil marketer in Nairobi.
Ms Onyonyi did not provide the criteria of the exercise but confirmed it was underway.
Mr Binramadan replaced Ibrahim Bugaighis as head of the firm’s Africa operations in 2018.
According to sources, the business is in trouble after it has emerged unit costs are now higher than gross selling margins. Insiders say the company seeks to retrench several senior employees and non-performing staff.