Uchumi Supermarkets cuts ties with employment agencies

Uchumi Supermarkets CEO Julius King'etich (left). The retail outlet has severed links with two employment agencies that had hired over 1,200 employees to work in its stores. PHOTO | FILE | NATION MEDIA GROUP 

In Summary

• The retailer has announced that it has terminated contracts with third parties that it outsourced workers from as part of an ongoing staff rationalisation.
• The affected workers were involved in frontline tasks such as store cleaning and arrangement of goods on shelves.
• As of June this year, Uchumi had 40 branches with 4,500 employees spread across East Africa, with a majority of them in Kenya, Uganda and Tanzania.

By OTIATO GUGUYU
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Uchumi Supermarkets has severed links with two employment agencies that had hired over 1,200 employees to work in its stores.

The retailer has announced that it has terminated contracts with third parties that it outsourced workers from as part of an ongoing staff rationalisation.

The affected workers were involved in frontline tasks such as store cleaning and arrangement of goods on shelves.

Chief executive Julius Kipng’etich said the decision was taken to improve efficiency.

“In the meantime, we will redeploy our existing resources as part of our optimisation plan,” he said.

LOOMING LAYOFFS

The supermarket chain has already closed down two of its non-performing branches in Uganda, following the closure of its Syokimau and Maua branches in Kenya.

Closure of the Uganda subsidiaries has thrown the future of 180 workers from the two branches into uncertainty. The workers were sent home awaiting further communication from Nairobi.

The company is currently carrying out an audit, which might also see more staff on its payroll forced to exit in a cost-cutting measure aimed at returning the once-vibrant retailer back to profitability.

Uchumi has also procured a forensic audit to investigate claims of staff involvement in the setting up of firms to supply the retailer with goods against procurement procedures in a fraud scheme that ate into its margins.

CIANO EXIT

Uchumi’s reorganisation began with the sacking of former chief executive Jonathan Ciano alongside chief finance officer Chadwick Omondi Okumu in June for what the board called gross misconduct and negligence.

The Kenya Union of Commercial Food and Allied Workers, wrote to the supermarket’s board, seeking involvement in the ongoing restructuring, which it says could lead to retrenchment of its members.

As of June this year, Uchumi had 40 branches with 4,500 employees spread across East Africa, with a majority of them in Kenya, Uganda and Tanzania.

Dr Kipng’etich, however, sought to reassure staff, saying the organisation will implement fresh initiatives to increase employee motivation and commitment in order to deliver value to shareholders.