Java House asks staff to resign as it commences massive layoffs

Coffee house chain Java has given its employees two weeks to resign as it starts cutting down its workforce through a voluntary exit programme.

In a memo to its employees, the restaurant revealed that even as restrictions meant to contain the Coronavirus pandemic were eased, demand had been materially lower than previous years levels with the revenue being reduced drastically due to the Covid-19 pandemic.

Java indicated that it had been struggling with reduced traffic at its outlets as well as closure of others due to the restrictions put in place to curb spread of the respiratory disease.

The company said it will initialise the staff rationalisation exercise through a voluntary separation option program that will provide an incentivised option to workers willing to resign.

“From the beginning of the Covid-19 crisis, even as restrictions were eased and food and beverage businesses such as ours begun to reopen their doors, demand has been materially lower than previous years levels and this will continue for a period of time. 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, our utility costs etc. and these are now moving towards a very low level in line with expected sales,” the company noted.

“Unfortunately the business is potentially over resourced at the current level of performance. Hence Java has had to make a difficult decision to offer the Program 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 C-19. It is also a way in which we can offer an alternative to those unable to work or on rotation to allow them pursue other interests,” it added.

Java indicated that the programme would be available to branch employees who have completed four years of service, commissary staff who have completed three years as well as support and operations staff who have been with the firm for more than one and a half years.

Employees 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 unutilised leave days.

Java House, which operates more than 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.

In April, the coffee house chain slashed employee compensation by up to 40 percent as the first set of restrictions implemented by the government, which included the closure of dine-in options for restaurants, as economic crises hit the sector.

This was followed by restriction of movement and curfews which reduced the hours that restaurants could operate, as a result lowering revenues even further.

The forms contain the Voluntary Separation Option programme, which Java described as giving “eligible employees an incentivised option to willingly resign from the company” by November 27.