The company has been providing catering services to the UB for a number of years, but Project manager Peter Manale said yesterday that the number of students who eat their food has dwindled dramatically and "the few that we have cannot sustain the business".

"If we continue operating, it would be financial suicide," he said. He revealed that they would only retain a quarter of the staff to serve the university as they cannot close the business because of contractual obligations. Moghul employees have been given a month's notice and would receive their January salaries.

Manale has written the employees saying because of economic constraints the company was reducing operational costs.

"The major factor that has affected our business is that originally when we started operating the old refectory at the University of Botswana, all students were eating on campus, thus giving us a stable and predictable business," the letter says. It adds that things have changed as students are given cash to eat wherever they want. This leaves the company in an unpredictable and unreliable operational situation. Already, the company is said to have lost 90 percent of its customers.

"We have therefore arrived at the decision to terminate your contract of employment as of December 1, 2006. You will work one month's notice and you will be paid a compensation of one month which falls into January," Manale says in his letter.

However, if things improve, the employees would be re-hired. The Botswana Travel Workers Union has lamented that procedures have been flawed in the retrenchment of Moghul employees. Organising secretary Chalido Madome said the shop steward was informed a few hours before the general workers were told of the retrenchment, hence there was no room for discussions.

Madome indicated that they have already written Moghul management indicating their displeasure.

He said Moghul had also failed to inform the Commissioner of Labour about its financial problems and the likelihood of job losses.

He said that the Moghul management could not reach a decision based on a hypothesis because they did not have official figures. The new UB meal system was introduced after a strike by students over meals.

The university management then decided that students from second year onwards would be given cash for their meals.