The study examined the post-retrenchment effects on employees using the case of the Telkom Kenya. The study dealt with the effects and outcomes of organizational retrenchment. It concentrated on the effect of retrenchment on the survivor (those who remain in the organization after the retrenchment), and on the organization. The effects of retrenchment can be either positive or negative, thus, most apparently, there are different factors in the background of the diverse impacts. The study examined these background factors from both organizational and individual points of view. The study was designed with the main objective of determining the effect of retrenchment on employees with specific reference to employees of Telkom Kenya. The specific objectives of this study were; to identify how the motivational levels of employees have been affected by retrenchment process and to establish how loyalty of employees has been affected by retrenchment process in Telekom Kenya. The study was carried out through a descriptive survey which was considered the most appropriate to carry the research as it gives in-depth information about this particular issue. A sample of 112 employees from a population of 1120 employees was selected using stratified random sampling technique. Semi-structured questionnaires were designed from the literature review and administered to the respondents using the drop-and-pick method. Data collected was analyzed using descriptive statistic, specifically the mean scores and standard deviations. The results were the presented in form of frequency tables and charts. From the study, it was found that the retrenchment process in Telkom Kenya affected various aspects of surviving employee's motivation and loyalty.