Safaricom to freeze staff hiring

February 17, 2011
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, NAIROBI, Kenya Feb 17- Mobile operator Safaricom says it is freezing any new staff hiring for the rest of the year as part of a cost cutting strategy.

The moves comes at a time the regions most profitable company is experiencing stiff competition in the telecoms market that threaten to eat into its revenues.

Safaricom Chief Executive Officer Bob Collymore on Thursday said the operator was currently implementing a new strategy that will help it respond more effectively to market changes in the sector.

“There is a head count freeze and also in the next few years there is going to be very little hiring if any but we will communicate this at a later date,” Mr Collymore said.

Safaricom will be looking to maximise the efficiency of its current employees, a move that could see them adopt double roles within the organisation.

It is currently reviewing the current market dynamics as it looks for how best to complement the declining voice revenue.

Mr Collymore said at its current tariffs, the business is self-sustaining arguing they were preparing for future price cuts as the Communications Commission of Kenya (CCK) continues to evaluate the interconnection and termination rates.
“At our current prices and numbers it works but for other people it could be a challenge,” he said.

The cutthroat competition in the telecoms market has proved a reality check for operators as they look to keep costs down.

The Safaricom chief also ruled out outsourcing and shutting down certain departments saying: “We are working through the budgets to find more creative ways to keep our costs down and people cuts is not the only cost you can look at.”

Mr Collymore said rather than getting carried away with the current price wars, Safaricom would instead continue to introduce innovative services that ensure it remains the market leader.

“This to me is a more interesting discussion to be having rather than to one shilling because we have a lot of exciting stuff coming out that ensure we are first to market,” he said.

At the same time, the operator has also ruled out the need for price controls in the sector but should instead be more responsive to existing market conditions and understand the consequences of drastic price cuts.

“The government needs to understand that we can’t meet that agenda if revenues keep coming down. You need profitability to invest, Mr Collymore said.

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