CBK: Kenyan Bosses plan to fire more workers

Kenyan workers are bracing for another wave of job cuts as corporate executives plan to reduce their workforces before January 1, 2024.

According to a Central Bank of Kenya (CBK) survey, most job cuts will happen before Christmas this year.

According to CBK’s survey, between September 4 and 15, approximately 26.3 per cent of company CEOs revealed their intention to downsize their workforces in the fourth quarter of 2023.

The CBK survey sampled 1,000 CEOs across various sectors, including key economy indicators.

Central Bank OF Kenya (CBK). A Central Bank of Kenya (CBK) survey predicts bosses plan to fire more workers before Christmas. Photo: Central Bank OF Kenya (CBK)/CBK

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Which sectors will lay off workers?

Sectors sampled were manufacturing, financial services, professional services, healthcare, agriculture, tourism, transport, and storage, among others.

Simultaneously, 635 employers indicated that they had no plans to hire new workers, posing a challenge for many Kenyan job seekers.

However, only 102 CEOs expressed their intention to expand their workforces before the end of 2023.

The CEOs cited a challenging business environment, marked by high taxation, increased operating costs, and decreased consumer demand.

In addition. Most highlighted that and exchange rate fluctuations, as reasons for trimming their payrolls.

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CBK Reasons for Layoffs

The passing of the Finance Act 2023 placed additional burdens on employers.

According to the passed Finance Act, employers are now required to match the 1.5 per cent employee contribution to the housing fund.

Additionally, employers are faced with elevated rates for the National Social Security Fund (NSSF) and selected value-added tax (VAT)

The previous year saw major employers also downsizing in the fourth quarter due to an economic slowdown attributed to political instability.

Many employers preferred to downsize over the uncertainty surrounding the 2022 elections.
Moreover, according to data from the Kenya National Bureau of Statistics (KNBS), the number of unemployed Kenyans rose to 2.97 million by the end of 2022.

This rise marked a 2.94 per cent increase during the third quarter of the year 2022.

Moreover, a significant proportion of unemployed individuals fell within the age range of 18 to 30 years which is a matter of national concern.

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