At least 73 employees of tyre distributor Sameer Africa will lose their jobs by end of May as the company struggles to stay afloat amid the economic crisis in the corporate sector.
This is after the company directors resolved on April 20, to close down the tyre business. All the affected employees are engaged in various tyre distribution locations.
In a letter addressed to the Nairobi County Labour office, Acting Managing Director Peter Gitonga said attempts to revive the company’s tyre business had failed despite implementing several strategies.
“The implication of this is that a number of positions/roles within the Company particularly roles that are currently undertaken by employees who are engaged at the affected locations, will become redundant. It is therefore contemplated that approximately seventy three (73) employees drawn from both management and unionisable cadres will have their employment contracts terminated on account of redundancy, ” the letter dated April 24 reads.
“Based on the above reasons and pursuant to Section 40(1)(a) of the Employment Act,2007 of th Laws of Kenya, the Company hereby issues the necessary statutory notice to decare the affected employees redundant effective 31st May 2020.”
All the affected members of staff will be paid their dues including severance payment as per their terms of contracts, the company said.
In January this year, the firm indicated that it would lay off 52 workers over harsh economic times.
Gitonga said that the process would be done in batches from February until later in April.
The company has continued to struggle even after its change of strategy in 2016 when it stopped local manufacturing of its key tyre brand Yana and opted to outsource to Asia.
Sameer’s number of staff has been declining in the recent years. The headcount dropped by 120 from 288 staff in 2017 to 168 at the end of 2018.
Its net loss was also widened 15.8 times to Sh182.8 million within the first six months of 2019.