Looming job losses as over 190 CEOs reveal plans to layoff employees
3 min read
About 197 CEOs reveal llan to layoff employees over the high cost of doing business in Kenya
About 197 CEOs reveal llan to layoff employees over the high cost of doing business in Kenya
More Kenyan workers face imminent job losses as more than 190 company executives disclosed intentions to cut staff in the upcoming three months.
According to the Central Bank of Kenya’s (CBK) poll of 1,000 CEOs from a variety of economic sectors, the high cost of doing business will be a factor in layoff decisions.
Specifically, 197 CEOs stated that in order to reduce operating expenses—which are also a result of high taxes and low purchasing power among Kenyans—layoffs will be required.
“Firms that 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.
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“The majority of the respondents (62 percent) were privately-owned domestic firms, while the rest were privately-owned foreign businesses, publicly listed domestic companies, and government-owned entities.
“48 percent of the respondents had a turnover of over Ksh1 billion in 2023. In terms of employment, 40 percent of respondents employed less than 100 employees, while 29 percent 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 layoff some staff in the first quarter.
At the time, only 106 noted that they would be hiring new employees.
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.
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