Kenya: More Trouble for Tuskys As It Fires Staff, Closes Branches, and Its Electricity Cut Off

The financially troubled Tuskys Supermarkets this week sacked tens of workers and shut down at least four more branches in Kenya, as the cash flow crisis at the retail chain deepened.

The ailing regional retail giant that is owned by Tusker Mattresses Ltd, sent home an undisclosed number of non-unionised workers, most of whom had gone for two months without full pay.

The retailer, which at its peak operated 63 branches in Kenya and Uganda, has been quietly shrinking its geographical spread owing to disputes with landlords over rent arrears.

Kenya Power has also disconnected electricity supply to a number of branches that have fallen behind in paying their bills, and these are now having to run on diesel generators.

In addition to all five Ugandan branches that have remained shuttered for weeks now, Nairobi's K-Mall outlet in Komarock Estate, Tuskys Hakati in the Nairobi Central Business District (CBD), the Kilifi and and Eldoret's Uganda Road branches are the latest to shut their doors.

The Tuskys chief executive, Daniel Githua, who had promised to respond to our queries on the financial situation facing the retailer, had not done so by the time of going to press. A reported cash injection of Ksh2 billion ($20 million) from an undisclosed Mauritius fund does not seem to have improved the fortunes of the debt-ridden retailer.

The closure of outlets started in April this year, with three branches in Nairobi (Tom Mboya), Kitale (Kitale Mega) and Mombasa (Digo Road); which the retailer then attributed to the social distancing requirements imposed by the government to contain spread of the Covid-19 pandemic.

Tuskys has an estimated 2,000 permanent and pensionable employees who are unionised and about 4,000 mainly low-cadre workers who are outsourced from firms such as Artemis Outsourcing Ltd, Amicum and Qrisha.

Termination letters

On Thursday, September 10, staff contracted under the outsourcing firms starting receiving their termination letters, some with promises to settle their salary arrears at the end of this month (September 30).

"We are staff that have been outsourced to Tuskys and we have been working there for a while. We have been called to their offices. Some of us are being given termination letters, others are being told that we will get back to you. For those who are being given termination letters you are given a cheque of which you are not sure whether it is going to bounce or not by the end of the month," one of the affected employees that had been summoned at the Artemis offices along Nairobi's Kimathi street told The EastAfrican.

The Kenya Union of Commercial Food and Allied Workers said none of its members have been impacted by the layoffs."If workers are sacked and happen to be our members they come to us for presentation," the union's Secretary General, Boniface Kavuvi, told The EastAfrican.

Artemis Outsourcing Ltd said through what it termed as a 'Notice of Frustration' to the affected employees, and which was seen by The EastAfrican, that its principal contract with Tusker Mattress Ltd is facing challenges that will also impact on the employment contract for its outsourced staff.

"...You are hereby notified to proceed on unpaid leave effective July 24, 2020, until further notice or when business operations at our client premises will normalise. Kindly note that in the event in the event that the situation of our client does not improve, clause 1 and 13 of your employment contract will take effect immediately."

Tuskys has not paid thousands of its direct and outsourced employees for the months of July and August; with salary arrears topping an estimated Ksh320 million ($3.2 million).

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