Retrenchment in KESC

Those laid off by KESC understand the underlying reason for high unemployment rate is due to energy crisis.

In times of crisis, difficult decisions must be made and, given the severity of the energy sector’s difficulties, measures such as the sacking of 4,000 employees at the KESC may be understandable, if somewhat regrettable. The utility company serving the commercial and industrial capital of the country needs to become financially viable and, unfortunate as it is, laying off some of its workforce may well be a necessary component of that strategy. Of course, at the same time, it must not lose sight of its social responsibilities as a major corporation.

Unemployment is high, so the sense of uncertainty those laid off by the KESC feel is an understandable emotion. Yet they must understand that a major reason for high unemployment is the energy crisis, which raises the cost of production at industrial units and forces them to run at less-than-optimal capacity. If the company were able to successfully turn itself around and were able to not only cut its costs but also cut down its significant line and transmission losses, and make a real dent in catching theft of electricity, then the decision to sack so many people and the criticism that it may have attracted will be mostly forgotten. The utility provider did earlier, according to reports, give the staff members laid off an option to voluntarily leave and all those who opted for it were given hefty severance packages. However, many chose to not take it and they are the ones who have been retrenched. In that context, the company’s claim that had they opted for the voluntary separation scheme they would have been far better off, does make sense.

It has to be said that the KESC is not the only major organisation in the economy that has been saddled with a very large and inefficient workforce. Several state-owned corporations such as Pakistan Railways, Pakistan Steel and others come to mind and many could cut down on their costs if those employees who did not contribute anything to productivity were asked to leave. That may sound a bit harsh but crucial to the economy getting back on track is the condition that precious resources such as labour are used efficiently.

Published in The Express Tribune, January 21^st, 2011.