Kenyan CEOs Eye December Job Cuts
Chief executives plan to reduce their payrolls before January 1, 2024, portending doom ahead of the holidays for Kenyan employees.
According to a survey conducted by the Central Bank of Kenya (CBK) between September 4 and September 15, 26.3% of business leaders indicated that they would reduce their personnel in the fourth quarter of 2023.
CBK surveyed 1,000 CEOs from various industries, including manufacturing, financial services, professional services, healthcare, agriculture, tourism, transportation, and storage.
At the same time, 635 employers disclosed that they had no intentions to hire new employees, which spells doom for many job-seeking Kenyans.
Only 102 chief executive officers (CEOs) indicated that they would increase their personnel by the end of 2023.
The difficult business climate created by high taxation, increased costs of doing business, decreased consumer demand, and the exchange rate was cited by the managers as one of the reasons for reducing their payrolls.
As a result of the passage of the Finance Act of 2023, employers are now required to match new deductions for their employees.
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For example, employers are now required to match the 1.5 percent housing fund contribution of their employees. This is in addition to the increased rates for the National Social Security Fund (NSSF) and an increase in certain VAT rates.
“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, leading employers also reduced employment in the fourth quarter due to the economic downturn. According to data from the Kenya National Bureau of Statistics (KNBS), the number of unemployed Kenyans will reach 2.97 million by the end of 2022.
This was a 2.94 percent rise from the third quarter of 2022. The decline in business was attributed to the political instability and unpredictability that plagued the 2022 elections.
The overwhelming majority of unemployed Kenyans were between the ages of 18 and 30.
Kenyan CEOs Eye December Job Cuts