AAR Hospital sacks workers in cost-cutting drive

AAR Hospital along Kiambu road on April 20, 2022. PHOTO | LUCY WANJIRU | NMG

By KABUI MWANGI More by this Author

AAR Hospital is reducing staff in a cost-cutting measure about a year after it began operations at its new facility on Kiambu Road.

In a memo to staff dated October 10, 2022, the chief executive officer Dr Ken Muma said jobs would be declared redundant as the hospital streamlines operations owing to low revenues.

“The intended redundancy is due to the fact that the volume of work at our facility has not grown as initially projected, and therefore the company cannot sustain the current workforce,” he said.

AAR Group is a holding company which owns and operates insurance units and primary care clinics in East Africa, including the hospital in Kenya.

Construction for the Sh2.5 billion 140-bed hospital, offering outpatient and inpatient services, began in 2017.

AAR started operations in Kenya in 1984, offering medical evacuation services by road and air. The company expanded to Tanzania in 2007 after being granted an insurance licence.

In 2011, the AAR Group’s shareholders resolved to separate the business into two distinct units, AAR Healthcare and AAR Insurance.

The insurance wing exited Tanzania in 2019, while the healthcare unit announced its exit last year.

Read: AAR to shut Tanzania clinics on rising financial woes

AAR Healthcare also has operations in Uganda, where it launched in 1994 and Kigali where it unveiled in 2005.

AAR Healthcare (K) Limited is the largest provider of outpatient healthcare services in the East Africa region, running a network of 19 medical centres in Kenya.

In 2020, a consortium led by the International Finance Corporation (IFC) acquired a 54.23 stake in the healthcare holdings. The consortium, which included Hospital Holding Limited, Sweden’s State-owned investment firm Swedfund and other private entities, paid over Sh1.5 billion in the acquisition.