Java House Africa axes staff in bid to weather COVID-19 storm

KENYA – East African leading coffee and food chain, Java House Africa has announced staff layoffs as it strives to stabilize its operations from COVID-19 occasioned disruptions.

The coffee chain has indicated that it will initialize the staff rationalization exercise through a voluntary separation option program that will provide an incentivized option to workers willing to resign by November 27.

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The program is targeting staff in different branches, starting with staff who have completed at least 4 Years of service within the group, commissary staff who have completed at least 3 Years of service within the group and support and operations leadership staff who have completed at least 1.5 Years of service within the group, reports Capital News.

Staff who opt to take up the option will receive benefits among them a 15 days’ pay for every complete year worked, an additional one and half months pay and compensation for unutilized leave days.

“Java has had to make a difficult decision to offer the programme to provide our staff the opportunity to receive a lump sum financial payment from the company, allowing them to create options for themselves following the prolonged effects of Covid-19.”

Java House Africa

This comes after April’s slashing of 40 per cent of staff salaries in a bid to ride out the economic impact of Covid-19.

The restaurant chain told the hundreds of employees that it had run out of ideas even after reviewing “every aspect” of cost reduction, including rent relief and cutting utility costs.

Java House, which operates over 80 outlets across East Africa, noted that the pandemic’s impact on the food and beverage business was not abating any time soon even after restrictions were eased.

“During the last few months, we have looked at every aspect of cost reduction in the business, including re-negotiating rents, our procurement of raw material, our labour schedules and our utility costs and these are now moving towards a very low level in line with expected sales.

“But unfortunately, the business is potentially over resourced at the current level of performance,” the company said in the resignation forms it distributed to workers.

“Java has had to make a difficult decision to offer the programme to provide our staff the opportunity to receive a lump sum financial payment from the company, allowing them to create options for themselves following the prolonged effects of Covid-19,” it added.

In March, the restaurant temporarily closed 14 of its shops as foot traffic dropped.

Meanwhile, Artcaffe Group, owned by US private equity firm Emerging Capital Partners (ECP) recently opened its third restaurant in the country’s capital, Nairobi.

The new branch located in Chester House, Kimathi Street is part of the three new branches Artcaffe is set to open as part of its expansion plan, to further consolidate the group’s share in the country’s rapid growing fast food sector.

The coffee chain has also set up a new concept under its umbrella dubbed ArtBakery, with several outlets already operational including one at Westgate Mall and the other on Limuru Road.

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