Kenyan workers face a new round of job cuts as chief executives plan to reduce their payrolls before January 1, 2024, spelling doom ahead of festivities.
According to a survey conducted by the Central Bank of Kenya (CBK) between September 4 and 15, about 26.3 per cent of company bosses, revealed that they would reduce their workforce in the 2023 Q4.
CBK surveyed 1,000 CEOs across different sectors including manufacturing, financial services, professional services, healthcare, agriculture, tourism, transport, and storage among others.
At the same time, 635 employers revealed that they had no plans to recruit new workers which casts doom for many Kenyans who are looking for employment.
Only 102 CEOs indicated that they would be increasing their workforce before the end of 2023.
The bosses mentioned the difficult business environment created by high taxation, increased costs of doing business, reduced consumer demand, and the exchange rate as some of the reasons for cutting their payrolls.
Following the passing of the Finance Act 2023, employers have been forced to bear more burden as they match new deductions for their staff.
For instance, employers are now required to match the 1.5 per cent employee's housing fund contribution. This is in addition to the increased rates for the National Social Security Fund (NSSF) and select VAT increase.
"The business environment and increased taxation were of greater concern for firms in the services and manufacturing sectors. Firms in the agriculture sector on the other hand were equally concerned about the business environment and the economy," the CBK survey noted.
"Other highly ranking concerns were the exchange rate and reduced consumer demand. Supply chain disruptions and weather conditions, were also important for agriculture sector firms."
Last year, top employers also cut jobs in Q4 as an economic slowdown hit firms. According to Kenya National Bureau of Statistics (KNBS) data, the number of jobless Kenyans grew to 2.97 million at the end of 2022.
This was a 2.94 percent increase from the 2022 Q3. The losses were attributed to reduced business owing to political instability and uncertainty that marred the 2022 polls
A vast majority of the unemployed were Kenyans between 18 -30 years.
