Zain cuts 2,000 jobs

Kuwait-based carrier Zain announced a cost cutting plan this week, which it claims will propel the company toward its target of being a top ten operator by 2011.

The main thrust of the initiative will see the firm reduce its 15,500 strong global workforce by 2,000 – a 13 per cent reduction across the board, with operations in Iraq, Jordan, Kenya, Kuwait, Malawi and Sierra Leone already implementing the changes.

According to Zain Group CEO, Saad Al Barrak, the Drive2011 initiative is expected to improve Zain’s operating margin by five per cent within 12 months. “This will be achieved through a combination of managed outsourcing, centralisation and leveraging capabilities, as well as training and development for our personnel, all of which will improve our operating efficiencies,” said Al Barrak.

Last month, a deal signed between Zain Kenya and Essar Telecom Kenya indicated that operators in developing markets are following the lead of those in Europe by striking agreements to generate opex and capex savings. Zain and Essar agreed to share 300 base stations over 15 years in Kenya.

Significantly, analysts at Informa believe this move is almost certainly an indication that Zain will look to strike more infrastructure sharing deals in some of the 21 other countries in the Middle East and Africa where it operates.