At least 102 employees were laid off by WPP Scangroup company a marketing service firm in the year ended December. Scangroup said it implemented most of the job cuts in May 2023.
The move is expected to facilitate effective operational excellence and corporate governance, allowing the group to focus on its core business areas.
“In 2023, we continued to progress towards our goal of building a future fit organization by streamlining the workforce and investing in the new talent and skills,” the company’s annual report read.
“We exited 15 percent of the workforce via redundancy in May as a result of the exercise,” the report further read.
However, out of the 102 employees who were laid off, 86 were contract workers while 16 were permanent staff. This adds up to 157 employees it laid off in 2020 when covid-19 pandemic disrupted businesses.
Scangroup Restructuring Plan
Scangroup announced a comprehensive restructuring plan that includes staff layoffs and strategic changes in its corporate structure.
In a statement, the company stated that the restructuring was aiming to facilitate operational excellence.
“The Proposed Restructuring is aimed at optimizing the Company group corporate structure into a leaner, simpler and more efficient structure that will facilitate effective operational excellence and corporate governance, while enabling the Group to focus on core business areas,” the company stated in a statement.
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The restructuring was also intended to minimize operational and compliance costs while maintaining service delivery in strategic markets.
Scangroup issued a profit warning back in November 2023, citing the “continued subdued economic environment in our markets of operations” as a key factor.
The firm also reported spending Ksh 178 million on a one-time staff retrenchment during that period. The company’s total staff cost a rose of 7.8 percent of Ksh 1.8 billion to 2.01 billion in the year under review.
The company has registered entities in operations in other countries including Ghana, Rwanda, Malawi, Uganda, Gabon, Mozambique, Mauritius and Gambia.
Former CEO Lawsuit
The announcement of the restructuring plan came amid the ongoing legal dispute involving Bharat Thakrar, WPP Plc, and WPP-Scangroup directors.
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Thakrar, who served as Scangroup’s CEO, initiated a Ksh 4.3 billion lawsuit against WPP, alleging “neo-colonialist practices and discriminatory tactics” leading to his removal in 2021.
In a statement, Scangroup is in the process of perusing the court pleadings to enter an appearance and prepare a defence.
“The directors are aware of a case filed by Bharat Thakrar, former CEO, former director, and a current shareholder of the company against the company. Service was effected on 23 April 2024,” the statement stated.
“The company is in the process of perusing the court pleadings to enter an appearance and prepare a suitable defence. The company cannot comment any further as the matter is the subject of an active litigation in court,” the statement further read.
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