Job losses increase even as state touts economic growth

Firms are sending employees packing citing a tough business environment even as the government maintains the economy has greatly improved.

At least 40 per cent of employers under the Federation of Kenya Employers (FKE) had by December last year indicated they were planning to reduce the number of employees this year, to meet the increasing costs of operating in Kenya.

This puts the average number at 2,000 members, including associations whose membership spread across the different sectors of the economy including manufacturing.

The latest to issue a redundancy notice is global security firm–G4S (Kenya) which has indicated it will sack at least 400 employees.

The company has pegged the decision on what it terms as ongoing reduction in business trading, “occasioned by the effects of the harsh economic challenges” that have led to 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 said in a notice to the Labour and Social Protection Ministry, which took effect on November 4.

“The redundancy exercise is likely to affect approximately four hundred ( 400 ) employees based in various locations in Kenya in both categories of management and unionsable cadres between November 4, 2024 and April 2025,” the notice reads.

The company has however affirmed its commitment to the Kenyan Market saying it has intention of implementing solutions that will secure employment for its employees whilst sustaining positive business performance.

“We wish to assure the Ministry that we shall adhere to all the minimum legal requirements stipulated for this kind of action,” Kimanani said in the notice.

The move by G4S paints a gloomy picture in the country’s labour market where companies have been laying-off staff as part of strategies to remain afloat, blamed on a tough business environment.It joins the growing list of firms that have either issued redundancy notices, plan to restructure operations or have already sent home staff.

Among the most recent is Tile and Carpet Centre and WPP Scangroup which are undergoing restructuring processes.

Restructuring at Tile and Carpet Centre at its Athi River production department is set to begin on December 6, 2024, 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.

Listed advertising firm WPP Scangroup laid off 102 employees in May this year and restructured roles in some of its units as it struggles to meet its revenue targets.

Tropikal Brand Africa in February this year also issued a redundancy notice. Mombasa Road-based Media company Standard Group in July this year announced it was sending home 300 employees as part of restructuring.

Other recent lay-offs have been at Copia which cut off 25 per cent of its staff, Wire Product Limited which sent home 178 employees, among others.

These developments reflect a challenging business environment in Kenya with the lay-offs hitting households hard as the country continues to grapple with a high unemployment rate.

This, even as the government holds firm that the economy has continued to recover in post-Covid era, with inflation also going down to a 14-year low of 2.7 per cent in October.

According to FKE, at least 70,000 jobs were lost in the formal private sector between October 2022 and November last year, with more lay-offs spilling into 2024.