Bleak future as employers plan to cut workforce by about 26.3 percent by January 2024; Report
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Kenyan employers planning to cut their workforce by about 26.3 percent by January 2024 according to a CBK report
Kenyan employers planning to cut their workforce by about 26.3 percent by January 2024 according to a CBK report.
Chief executives plan to decrease their payrolls before January 1, 2024, which portends doom for Kenyan workers as the country prepares for the holidays.
In a study done by the Central Bank of Kenya (CBK) between September 4 and 15, roughly 26.3% of business owners said they would cut back on staff in the fourth quarter of 2023.
CBK surveyed 1,000 CEOs across different sectors including manufacturing, financial services, professional services, healthcare, agriculture, tourism, transport, and storage among others.
In addition, 635 firms said they had no intentions to hire new employees, which is bad news for many Kenyans looking for work.
Only 102 CEOs indicated that they would be increasing their workforce before the end of 2023.
Employers cited a number of factors for reducing their payrolls, including a challenging business environment brought on by high taxes, rising operating expenses, declining consumer demand, and the currency rate.
Employers are now under more pressure as a result of the Finance Act 2023’s passage as they must now match new employee deductions.
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For instance, businesses are now compelled to match the 1.5% housing fund contribution made by employees. In addition, several VAT rates have been raised, as have the rates for the National Social Security Fund (NSSF).
“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.
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