Fenaka was forced to lay off employees because the company could not survive without reducing payroll expenditure, Managing Director Muaz Mohamed Rasheed said on Wednesday.
In his first press conference since taking charge of the company, Muaz said the company's workforce increased dramatically during the previous government's term, rising from 2,700 employees at the end of 2018 to 8,100 employees by the end of this year.
"Looking at the number of employees, the wage cost was previously MVR 20 million. Now on average we have to spent MVR 74 million a month. We had to spend MVR 79 million the last time we paid salaries. Even by letting 904 employees go after their contracts expired, MVR 5.3 million was saved from payroll," Muaz said.
Addressing criticism faced for dismissing employees after the new government came to power, Muaz said the company was forced to downsize in order to ensure its survival.
The company was spending large amounts on contract employees who were hired for work on projects that were not progressing adequately, he said. They were therefore laid off in order to reduce the wage bill and save the company, Muaz said.
Backing Muaz, Chief Human Resources Officer Hussain Hassan Fulhu said a large number of employees had been hired outside the company's structure. Departments that needed 30 people were overstaffed and hiring processes for island branches had been unacceptable, he said.
"63 employees were recruited to complete work on an office building in Feevah. 137 employees were recruited to work at the Laamu Isdhoo powerhouse. This is work that would have been finished with about 12 people if it had been contracted to a company," the Chief Human Resources Officer said.
According to information shared by the official, the wage bill increased monthly in 2023 and MVR 82 million was spent on salaries and allowances during some months.
The most important task at present was identifying and right-sizing overstaffed departments, he said.
The former Fenaka management was accused of serious wrongdoing at all levels within the company from hiring practices to logistics and operations.
