- A report by the Federation of Employers in the country (FKE) showed 40% of employers planned to cut jobs in 2024 amid high taxes
- G4S Kenya was the latest company to announce layoffs, citing poor economic conditions that have reduced business and increased operating costs.
- While explaining the job losses, FX Pesa senior market analyst Rufas Kamau cited the main reason behind the high tax
Despite the government's claims that the economy has improved significantly, several companies are cutting jobs, a sign of tough economic times.
Source: Facebook
TABLE OF CONTENTS
- Why are companies laying off workers?
- Why are investors fleeing Kenya?
Which companies have cut jobs in Kenya?
1. G4S Kenya
2. The Tile and Carpet Center announces layoffs
3. Common Group
4. Titanium base
5. Postal
Which companies fired their employees in 2023?
1. G4S Kenya
2. Tile and Carpet Centre
3. Standard Group
4. Base Titanium
5. Postal
Why do companies cancel?
A report by the Federation of Employers in the country (FKE) showed that 7,000 or 3% of formal workers lost their jobs between October 2022 and November 2023.
The report revealed that 40% of employers planned further job cuts in 2024.
FKE cited rising interest rates, tax measures, international political developments, and climate change as the main factors affecting business in the country.
“Kenya's private sector is facing challenges due to the high cost of capital, due to factors such as interest rates, inflation, market conditions and government policies. The country is experiencing a significant increase in investors from Kenya due to continued development negative feelings of investors in emerging markets and high costs of doing business,” FKE said.
FKE said the government should focus on improving the purchasing power of citizens and the flow of money in businesses.
“Key taxes that need to be reviewed include VAT on petrol, PAYE, and company tax. Bringing VAT back to 8% and reducing PAYE to 25% is essential to tackling food inflation and supporting household incomes. Bringing back corporation tax to 25% and removing the minimum sales tax will help attract investment and create more jobs,” it suggested.
Why are investors moving to Kenya?
While explaining the job losses, FX Pesa senior market analyst Rufas Kamau cited high taxes as a major contributing factor.
Kamau told TUKO.co.ke that companies and big rich people fled to countries with stable tax policies and friendly economic policies.
“The richest people find comfort in a country with a stable tax policy, a currency and a growing economy. The current administration's progress is rapidly changing tax policy, undermining economic growth,” Kamau explained.
Which companies have reduced their operations in Kenya?
1. G4S Kenya
More than 400 Kenyans will lose their jobs between November 2024 and April 2025 after G4S Kenya announced layoffs.
G4S Kenya announced the layoffs, citing poor economic conditions that have reduced business and increased operating costs.
“The retrenchment exercise is likely to affect approximately four hundred (400) workers in various locations in Kenya in all management and labor cadres between November 4, 2024, and April 2025,” the company said.
2. Tile and Carpet Center announces plans to lay off some of its employees
The Tile and Carpet Center issued a layoff notice at its Athi River production department.
According to Capital Businessthe company's restructuring process is scheduled to begin on December 6, 2024, paving the way for business continuity.
The company's human resources manager, Mandeep Degon, noted that the job cuts were due to reduced production demand and economic constraints.
“Reducing operations at our manufacturing plant is necessary to maintain the company's long-term viability,” said Degon.
3. Standard Group
In July, Standard Media Group announced the layoff of more than 300 employees across various departments as part of a restructuring process.
According to a statement from the Group, affected employees were notified individually.
Recently, workers from radio stations affiliated with Standard Media Group went on strike after the company failed to pay them for eight months.
4. Base Titanium
Business Daily reported that at least 870 jobs are at risk after Kwale-based Base Titanium announced it will exit the Kenyan market.
Base Resources, the company's parent company, indicated that titanium resources were depleting, and therefore, could not continue its operations beyond December 2024.
The Australian company paid KSh 11.3 billion in taxes to the government in the year ending June 2022. The supply is expected to lose more than KSh 9.9 billion due to their activities with the miners.
5. Postal
Kenya Post dismissed 29 employees in June over alleged fake academic documents.
Post Executive Director John Tanui revealed that the affected staff, including junior and mid-level officers, were dismissed in June.
Posta had hinted that it would lay off 504 workers in 2024 as it sought to reduce its monthly bill from KSh 122 million to KSh 70 million.
Which companies fired their employees in 2023?
A number of Kenyan and foreign companies laid off their workers in 2023, citing poor economic conditions.
Among the companies laid off are British publishing company De La Rue, e-commerce company Copia, and agri-technology company Twiga Foods.
Brookside Limited reduced its operations after failing to obtain an export permit from the Kenyan government.
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Source: TUKO.co.ke
