Over 240 company bosses have revealed plans to reduce their workforce within the next three months owing to the harsh economic times.
In a survey conducted by the Central Bank of Kenya (CBK) among 1,000 Chief Executive Officers (CEOs), 243 company bosses noted that they would have to fire some of their employees.
The CEOs explained that the planned layoffs were necessary as they tightened their belts owing to the current economic times.
In particular, those in the manufacturing industry highlighted the cost of doing business as a major factor affecting their businesses.
"Key concerns for firms in the services sector include the business environment, increased taxation, and the economic environment (high cost of borrowing)," read the report in part.
"In addition to the concerns raised by firms in the services sectors, manufacturing sector firms were also concerned about subdued consumer demand and constraints to business financing."
Likewise, the survey also spelt doom for the unemployed Kenyans as another 673 bosses noted that they will be maintaining their workforce as it is.
Only 84 CEOs plan on hiring new staff within the second quarter of 2024.
Notably, the company bosses have also warned of tougher times ahead should the Finance Bill, 2024 sail through as is.
The employers detailed that some of the tax proposals would adversely increase the cost of doing business and ultimately influence the policies of their workforce.
Finance Bill 2024 seeks to introduce a number of taxation measures including Eco Levy on specific manufactured goods such as diapers, plastic bags and smartphones.
On the other hand, the Bill proposes to introduce a 2.5 per cent Motor Vehicle Tax that will be paid by all car owners.
Coupled with other salary deductions such as the Housing Levy and the Social Health Insurance Find (SHIF) deductions, companies' expenditures will increase.
"Respondents expressed concerns about the proposed fiscal measures in the Finance Bill 2024, whose implementation is expected to push further the cost of doing business and dampen activity," read the report in part.
As part of the mitigation measures that will enable businesses to thrive, the CEOs highlighted specific interventions such as the reduction of the cost of doing business and stable taxation policies.
