Chief Executive Officers (CEOs) of over 200 private sector companies are planning to lay off hundreds of thousands of employees in 2024 as a way of cutting cost of business operation.
According to the Central Bank of Kenya (CBK) May 2024 survey, 215 companies intend to let go of 18 percent of the staff they had in 2023.
Additionally, the report noted that only 8 percent of the bosses believed that hiring or talent retention was a solution to some of the factors that were constraining their growth.
Moreover, many of respondents reported that the expectations of subdued business activity in the next quarter of 2024 was largely contributed by the expected fiscal measures in the Finance Bill 2024.
According to the 2024 Economic Survey, non-bank private firms employed 2,073,600 employees in 2023. Firing 18 percent means that 373,248 people will lose their jobs in 2024.
Also Read: S.K Macharia Shuts Down Directline Assurance, Fires All Employees
“The respondents were from the following sectors: financial services (17 percent), manufacturing (12 percent), professional services (11 percent), agriculture (10 percent), healthcare and pharmaceuticals (9 per cent),
“Tourism, hotels, and restaurants (8 percent), ICT and telecommunications (7 percent), transport and storage (4 percent), real estate (3 percent), and education (3 percent). Other sectors such as wholesale and retail trade, building and construction, mining and energy, and media accounted for two percent each or less,” the report read in part.
CEOs Explain Reasons for Firing and Business Outlook
The respondents of the survey expressed their concern for the measures in the Finance Bill 2024 adding that they will increase the cost of doing business even further and ultimately leading to job losses.
However, the executives maintained optimism for global and local growth of businesses in different sectors in the second quota of 2024.
The May 2024 CEOs Survey showed sustained global and local growth of companies in different sectors because of macroeconomic stability which will ease inflation and reduce the prices of goods.
“Global growth prospects remained largely unchanged relative to the March Survey, supported by easing inflation and expectations of interest rate declines, despite concerns over geopolitical risks,” added the CBK survey.
At the same time, the companies reported increased business activity in the second quota of 2024 compared to the first.
“Respondents in sectors such as finance, agriculture, education, and ICT recorded improved activity, while firms in sectors such as health, real sector, wholesale and retail trade, tourism, transport, and storage recorded decelerated activity,” the report stated.
Also Read: Kenyan CEOs Explain Why they Will be Firing Employees in 2024
January 2024 Mass Firing Warning
In a January 2024 Market Perception Survey done by the Central Bank of Kenya (CBK), employers in the banking sector were the only bosses who indicated the possibility of hiring and retaining employees in 2024.
Further, the survey explained that the banking sector was expected to expand because of a projected moderate to high demand for credit in February and March 2024.
On the other hand, employers in non-banking sectors anticipate a significant decline in employee retention rates compared to 2023 adding that they experienced several challenges including the high cost of living and the decline in business because of high taxation.
“Low activity, an unfavorable business environment, decline in business due to high taxation and high fuel prices, reduced output, poor cash flow, increased cost of doing business and increased cost of production,” stated the report.
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