More Job Losses: Kenya’s Economic Crossroads
Despite government assurances of economic recovery, 2024 has seen a worrying trend of job cuts across key sectors in Kenya. A Federation of Kenya Employers (FKE) report paints a grim picture, revealing that 7,000 formal workers lost their jobs between October 2022 and November 2023, with 40% of employers planning further reductions in the coming year.
FKE attributes these layoffs to several challenges, including rising interest rates, tax burdens, geopolitical tensions, and the impacts of climate change. “The Kenyan private sector faces challenges due to high capital costs, influenced by factors like interest rates, inflation, market conditions, and government policies,” the organization stated, emphasizing the growing outflow of investors due to unfavorable business conditions.
Calls for Tax Reforms
To counter the situation, FKE has urged the government to enhance citizens’ purchasing power and ease the financial strain on businesses. “Key taxes that need review include VAT on petrol, PAYE, and corporate tax. Reverting the VAT to 8% and reducing PAYE to 25% is crucial for addressing food inflation and supporting households’ disposable income,” FKE recommended.
Market analyst Rufas Kamau echoed these concerns, attributing the flight of businesses and wealthy individuals to unpredictable tax policies and economic instability. “The super-rich find comfort in countries with stable taxation policies, currency, and growing economies. Kenya’s shifting tax environment and economic slowdown are driving them away,” Kamau observed.
Companies Affected by Layoffs
1. G4S Kenya
Between November 2024 and April 2025, security firm G4S Kenya is set to lay off over 400 employees. The company cited reduced business and escalating operational costs as the reasons behind its decision. “The redundancy exercise is likely to affect approximately 400 employees across various locations in Kenya,” the firm stated.
2. Tile and Carpet Centre
Tile and Carpet Centre announced plans to downsize its Athi River production plant, with the restructuring set to begin on December 6, 2024. Human Resource Manager Mandeep Degon explained, “Downsizing operations at our production plant is necessary to maintain the company’s long-term viability.”
3. Standard Media Group
In July 2024, Standard Media Group terminated over 300 employees in a company-wide restructuring exercise. Striking employees from affiliated radio stations also raised concerns about delayed salaries, with some waiting eight months for payment.
4. Base Titanium
Kwale-based Base Titanium is set to cease operations in December 2024, citing depleted mineral resources. The closure threatens over 870 jobs and KSh 9.9 billion worth of supplier contracts, marking a significant loss for the local economy.
5. Postal Corporation of Kenya (Posta)
Posta dismissed 29 staff in June over allegations of forged academic documents. Additionally, it announced plans to sack 504 employees in 2024 as part of cost-cutting measures aimed at reducing its monthly wage bill from KSh 122 million to KSh 70 million.
The Bigger Picture
As Kenya navigates these turbulent economic times, experts and stakeholders continue to urge the government to create an investor-friendly environment and implement bold reforms to stabilize the job market and support businesses.
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More Job Losses: Kenya’s Economic Crossroads
