Over 250 Chief Executive Officers (CEOs) have announced plans to reduce their workforce within the next two months due to the rising cost of doing business.
In a survey conducted among 1,000 CEOs by the Central Bank of Kenya across various fields, 25.7 per cent of the respondents intimated that they would let some of their employees go as they undertake austerity measures to reduce operation costs.
On the other hand, 637 respondents revealed that they would not be seeking to make any recruitments between February and March, a revelation that cast doom among job seekers.
Notably, out of the 1,000 CEOs, only 106 of them revealed that they would be adding more people to their workforce.
An aerial view of companies in Industrial Area in Nairobi.
According to the report, the looming projection is that the job market has been occasioned by the increased costs of doing business which is also attributed to increased taxation.
Notably, employers have been among those affected by taxation policies included in the Finance Act 2023 which introduced additional costs for employers including the 1.5 per cent housing levy.
Additionally, rates were increased with another looming increase in deductions for the Social Health Insurance Fund (SHIF).
“High-interest rates, increased taxation and the impact of a weaker Shilling are expected to keep input costs elevated, with global geopolitical tensions potentially affecting supply chains.
“Firms that reported possible difficulty in expanding their operations cited difficulties in securing finances for working capital. Other reasons cited included increased overhead costs, notably, the cost of electricity, fuel, labour and an increase in taxation which has worsened the cost of doing business,” read the report in part.
Already, private security companies have warned that they could lay off half of their staff should the government push with the Ksh35,000 minimum salary directive.
In a statement issued by the association of private security companies, it was highlighted that over 700,000 would be rendered redundant in the process.
Meanwhile, three national companies including Procter and Gamble, and Bayer are expected to exit the Kenyan market in the next two years, a move that will render over 1,000 employers jobless.
Private Security Regulatory Authority (PSRA) CEO Fazul Mahamed undergoing a security check at a mall on December 8, 2023.