People looking for a job

By the end of 2024, the Central Bank predicts that over 1 million people will be jobless as a result of widespread company restructuring and mass layoffs.

Several companies have set their muscles in different countries, preparing to exit the Kenyan market. Over six multinationals will not operate in Kenya by June 2025.

In response to the growing cost of conducting business, more than 250 Chief Executive Officers (CEOs) have declared intentions to downsize their personnel over the next two months.

In an investigation by the Central Bank of Kenya into 1,000 CEOs in a range of industries, 25.7% of the participants hinted that they might fire some staff members in order to implement cost-cutting measures.

However, 637 respondents said that they would not be looking to hire any new employees between February and March. This news was devastating for many who were looking for work.

Remarkably, just 106 of the 1,000 CEOs said they planned to increase the number of employees in their employ.

The analysis projects that rising expenses associated with conducting business, which are also linked to higher taxes, will have an impact on the labour market in the near future.

The tax policies incorporated into the Finance Act 2023, which imposed new costs on them like the 1.5% housing charge, had a significant impact on employers.

Furthermore, prices were raised in anticipation of an impending rise in Social Health Insurance Fund (SHIF) deductions.

Supply chains may be impacted by global geopolitical tensions, which are predicted to keep input prices high due to high interest rates, higher taxes, and the effect of a lower yuan.

Businesses that indicated potential difficulties in expanding their operations mentioned challenges in obtaining funding for working capital. Additional factors mentioned in the research were rising overhead expenses, particularly those related to labour, fuel, energy, and taxes, which have made conducting business more expensive.

Private security firms have already issued warnings, stating that should the government proceed with the Ksh35,000 minimum pay order, they may have to fire half of their workforce.

Over 700,000 will be made redundant in the process, according to a statement released by the Association of Private Security Companies.

In the meantime, six multinational corporations—Procter & Gamble, Bayer, and others—are anticipated to withdraw from the Kenyan market during the next two years, which would result in the unemployment of over 1,000 employers in the private sector, and over 200,000 workers would be directly and indirectly affected.

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