George* used to work for one of the leading marketing services firms in Kenya until May last year when he was served with a redundancy notice.
He has since remained unemployed and as the year starts, he is unsure of what the future holds for him.
The father of three is now juggling between paying school fees and meeting household bills, his bleak financial position notwithstanding.
“Things have been tough. I knock on doors every day looking for employment, but nothing seems to be coming through. I am depending on the few coins I make here and there selling shoes online,” he narrates.
For Susan Achieng, a former employee at an Export Processing Zone in Nairobi, her employer sent her and several others parking two months ago citing operating costs.
“They said they were reducing the number of staff since they were not making enough money hence struggling to pay salaries,” she recalled.
She is now running a vegetable stall in Umoja Estate which helps her fend for her children with support from her husband who is a driver in a distribution company.
The two are part of a larger number of Kenyans who lost their jobs in 2024 as firms in the private sector restructured to remain afloat, with some winding up operations.
Most firms have blamed a tough business environment which has seen them either sink into losses or significant drops in earnings.
This, even as the government maintains that the economy has greatly improved with prospects looking great.
At least 40 per cent of employers under the Federation of Kenya Employers (FKE) had last year indicated they were planning to reduce the number of employees to meet the increasing costs of operating in Kenya.
This puts the average number at 2,000 members, including associations whose membership is spread across the different sectors of the economy.
Dozens of companies actualised the redundancies which have rendered thousands of Kenyans jobless, with numbers estimated to be above 50,000 in the formal private sector.
This adds to the more than 100,000 jobs that were lost in the sector between October 2022 and November last year, according to FKE, with the country grappling with high unemployment as firms decry high operating costs.
“Kenya’s economy is becoming more expensive due to unplanned taxes, fees, levies and charges,” FKE said.
FKE notes that although the overall unemployment in Kenya is at 12.7 per cent, youth ( 15 – 34-year-olds), who form 35 per cent of the Kenyan population have the highest unemployment rate, of 67 per cent.
In 2023, the economy created 848,200, the Kenya National Bureau of Statistics ‘ Economic Survey 2024 indicates mainly in the informal sector, with wage employment in the modern sector accounting for 122,800 new jobs.
“The informal sector created 720,900 new jobs and accounted for 85 per cent of all the new jobs created in 2023,” KNBS says in its report.
The government is yet to release the official numbers for last year. President William Ruto however recently said the affordable housing programme has created some 200,000 jobs and more would be created as the country targets to build a million houses by 2027.
The government has also in the last two years trained hundreds of youth in digital skills to access jobs and other opportunities online, as well as signed labour export agreements with various countries, including Germany.
COMPANIES WINDING UP
Some of the companies that announced redundancies last year include Tropikal Brand Africa.
Mombasa Road-based Media company Standard Group also sent home about 300 employees as part of a restructuring.
Other recent layoffs have been at Copia which cut off 25 per cent of its staff, Wire Product Limited which sent home 178 employees, Tile and Carpet Centre, WPP Scangroup, among others. Restructuring at Tile and Carpet Centre at its Athi River production department began on December 6, a move management said is part of a strategic realignment aimed at ensuring the company’s long-term sustainability.
According to Head of Human Resources, Mandeep Degon, the decision to downsize was carefully considered in response to a decline in production demand and broader economic constraints.
“Downsizing operations at our production plant is necessary to maintain the company’s long-term viability,” Degon said.
Security firm– G4S (Kenya) is also sending home at least 400 employees. The company has pegged the decision on what it terms as an ongoing reduction in business trading, “occasioned by the effects of the harsh economic challenges” that have led to a reduction in revenue and high costs of running its business.
“We regret to advise the Ministry of Labour and Social Protection of the organisation’s intentions to declare several positions redundant,” Human Resources Director Helgah Kimanani had said in a earlier notice to the Labour and Social Protection Ministry, which took effect in November last year.
“The redundancy exercise is likely to affect approximately four hundred ( 400 ) employees based in various locations in Kenya in both categories of management and unusable cadres between November 4, 2024 and April 2025,” the notice reads.
The situation remains gloomy, with more expected to be kicked out. At least116 companies have officially shut down, with another 115 warning of imminent closures within the next three months.
This wave of shutdowns has already led to widespread layoffs across sectors such as manufacturing, retail, ICT, and other service industries, compounding the country’s high unemployment challenges.
Even so, the government insists that the economy has continued to recover in the post-Covid era, with inflation also going down to a 14- year low of 2.7 per cent in October.
Central Bank of Kenya’s Market Perceptions Survey for November 2024 notes that while firms were keen on increasing employment, respondents indicated that the rise in taxation, reduction in consumer purchasing power and demand uncertainties may delay hiring decisions.
Stanbic Bank’s Purchasing Managers Index for December notes that business expectations remained relatively weak and softened slightly since the start of the fourth quarter, despite firms recording an improvement in business conditions midway through the final quarter of 2024.
“Input and output cost pressures increased due to higher taxes and increased outlays by firms to support higher sales volumes. Despite the notable improvement in current conditions in December, firms remain gloomy about the outlook,” said Christopher Legilisho, Economist at Standard Bank.
Just eight per cent of firms expect activity to rise over the next 12 months, with comments relating positivity to new marketing, digital technologies and branch openings, Stanbic noted.
The government has maintained that the economy is on a growth trajectory with employment increasing. During his Jamhuri Day address, President William Ruto said that the number of employment opportunities has increased over the past two years, with new jobs for teachers, agriculture sector workers, healthcare professionals, building and construction, seafarers and outside Kenya.
“We are hiring an additional
20,000 teachers, while our rejuvenated micro, small, and medium
enterprises have created 840,000
jobs this year,” Ruto said.
