East African Portland Cement Company had retrenched 320 employees by Thursday afternoon and will release 180 more before end of June, insiders have said.
The sources said some of those being targeted are about to retire, have disciplinary cases or were employed on contract.
A senior manager, who requested anonymity, confirmed the move saying the company cannot handle a large number of employees.
“The company has seen its cement production halted, cement stocks depleted and staff salaries delayed over the last eight months,” said the manager.
“Our company reported a loss of $9.58 million in the second half of 2017, from a loss of US$2.45 million in the same period in 2016. This forced the MD, Peter ole Nkeri, to act on orders of the board to cut the number of workers."
The board halted the company's plan to sell part of its land
in Athi River in April, at about $100 million to the government for the sake of solvency.
It had started discussions on selling 14, 000 acres of land to the newly established Special Economy Zones Authority but the board opposed this, the manager said.
Nkeri did not answer calls or respond to SMSs for comment on the matter.
He was appointed CEO on August 4, 2016 and succeeded Kephar Tande.
It was reported in November 2016 that EAPCC planned to retrench 1,000 out of its 1,500 employees and sell part of its land worth Sh8 billion for a turnaround.
At that time, the firm dismissed the Auditor General’s report that it was insolvent.
EAPCC chairman William Lay explained that the country’s third largest cement maker by market share was “asset rich but cash poor”.
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Some of the retrenched workers claimed they had been “targeted maliciously”.
But some managers, who did not want to be named, defended Nkeri saying the board gave the instruction.
“Those accusing the MD have been serving three-year contracts. The company renewed them for another three years but they will expire at the end of this month,” one said.
He added that some employees' contracts expired in 2015.
The source noted that under employment and contract laws, a worker cannot serve more than five years without being employed permanently.
"The company can be sued by those on contract if they are not laid off," he said.
The senior manager further said the board had been asking many questions about companies such as Bamburi and Mombasa Cement, which were described as doing well with less than 500 employees each.
Another staff member, who received her letter on Wednesday evening, expressed worry about getting her pay.
“Banks have been holding our salaries because EAPCC has not been remitting loan deductions for almost nine months. All the banking rights were taken away by Standard Chartered and Barclays banks and handed to Kenya Commercial Bank,” she said.
The former worker said that with the new arrangements, staff with loans from those banks have suffered a great deal.
“Once our salaries are deposited to our accounts, the banks withhold them because the company does not submit loan deductions. We have suffered for many months. I have a car loan which requires servicing yet I have been fired," she said.
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