More Kenyans are on the verge of losing their jobs after over 190 company managers revealed plans to reduce their workforce within the next three months.
In the Chief Executive Officers (CEOs) survey that was conducted by the Central Bank of Kenya (CBK) among 1,000 company bosses across several sectors of the economy, the layoff will be informed by the high cost of doing business.
Particularly, 197 bosses noted that the layoffs would be necessary as they move to tame the cost of doing business which has also been occasioned by high taxation and poor purchasing power among Kenyans.
"Firms which reported possible difficulty in expanding their operations cited difficulties in securing finances for working capital and high overhead costs. Other reasons cited included subdued demand.
"Some firms reported possible difficulties in expansion, particularly due to liquidity constraints, increased cost of borrowing, increased cost of production, (particularly the cost of energy), issues around taxation, and infrastructure," read the report in part.
On the other hand, Kenyans who are seeking employment could still have to wait for longer given that 636 CEOs revealed that they would be maintaining their workforce.
Only 168 bosses noted that they would be employing new staff to join their current workforce.
"The majority of the respondents (62 per cent) were privately-owned domestic firms, while the rest were privately-owned foreign businesses, publicly listed domestic companies and government-owned entities.
"48 per cent of the respondents had a turnover of over Ksh1 billion in 2023. In terms of employment, 40 per cent of respondents employed less than 100 employees, while 29 per cent of respondents employed over 500 people," read the report in part.
However, it was also noted that the number of employees who have projected layoffs has reduced significantly.
In a similar survey that was conducted in January this year, 257 employees noted that they were planning to lay off some staff in the first quarter.
At the time, only 106 noted that they would be hiring new employees.
Way Forward
To address the challenges facing this sector, the CEOs are calling on the government to adopt a more predictable taxation regime.
"Increased efficiency and innovation, diversification of revenue streams and development of new products are some of the identified internal factors that could strengthen firms’ economic outlook, while external factors such as macroeconomic stability, certainty around taxation issues and easing the cost of doing business could positively impact firms’ outlook in 2024," read the report in part.
