The latest stats released by the Kenya National Bureau of Statistics (KNBS) indicated that about 80,000 Kenyans lost their jobs in the last quarter to December 2022. This, according to KNBS, took the number of jobless Kenyans to 2.97 million.
Although many Kenyans have disputed the figures by KNBS, saying that the number of unemployed Kenyans is higher than the quoted, the numbers still paint a gloomy picture of Kenya’s unemployment rate and a far-fetched hope of it ever being fixed.
In the past few months, companies in Kenya have been laying off their employees. During the week, Megascope ordered all their employees to go on a compulsory 3-month-unpaid leave “due to tough economic environment.” From the letter, it is evident that they are being laid off.
At the same time, Microsoft in Kenya has been laying off employees since the year began. Most of those laid off had been poached from giant companies such as Safaricom. Banks and other companies have also been following suit.
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Global Focus
But the layoffs have been going on all around the world. Big tech companies have been laying off employees en masse. Twitter, for instance, send home over 80 percent of its workforce when Elon Mask finally bought the company and started restricting it.
Amazon laid off 27,000 employees during its restructuring process followed by Google which sent home 12,000 employees. Meta, the parent company of Facebook and Instagram fired 10,000 employees while Microsoft has so far fired 10,000.
Goldman Sachs fired 3,200 while Coinbase did away with 25 percent of its workforce. Zoom fired 15 percent of its workforce while Glassdoor and Twilio fired 15 percent of their employees each. Indeed also did away with 15 percent of workers while LendingClub fired 14 percent.
At the same time, Vimeo, DocuSign, Salesforce, and Gemini fired 11 percent and 10 percent of their employees respectively. Mcdonalds’ has since shut down its corporate office and hundreds of jobs are in the pipeline of being lost.
This year, technology companies alone have rendered at least 330,000 people jobless. Nearly 1,600 companies around the world have laid off employees as they seek to cut down on expenses and restructure their operations.
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Cause of Layoffs in Kenya
The majority of layoffs in Kenya have been blamed on the “tough economic environment” around the country. Most companies see it as the only avenue to cut costs as they look at restructuring their operations. This has left millions without jobs on short notice.
When it comes to layoffs, the focus is always on major notable companies and sectors, but rarely do people focus on the Small and Medium Enterprises (SMEs) where layoffs are happening daily. The sector employs 86 percent of Kenya’s population.
Statistics show that at least 450,000 small businesses are shutting down in Kenya each year. This translates to at least 30,000 businesses closing shop every month and at least 1000 dying every day. This means that a day does not pass in Kenya without one becoming jobless.
In Kenya, there are no clear figures about the unemployment rate. The figures are often given by the Kenya National Bureau of Statistics (KNBS) but Kenyans feel they aren’t the correct figures.
At one point, an official from the National Employment Authority (NEA) quoted the unemployment figure at 43.5 percent but the figures were quickly dismissed and never saw the light of day.
The majority of the unemployed in Kenya are the youth. According to the latest Census report, the number of youth in Kenya is 74 percent.
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Reasons Behind Global Layoffs
The Russia-Ukraine war brought major economic decline globally. Supply chains were disrupted, interest rates and fuel costs rose, headwinds of inflation had picked up, and the world was staring at a recession.
“With the online business losing its sheen post the pandemic, the newly hired employees turned out to be expensive. The fear of recession and inflation coupled with slow growth had many companies looking to restructure and cut costs,” Lad added.
After the first half of the year, balance sheets became stretched owing to dropping sales and revenues. Initially, companies tried to resist the economic shocks by freezing their hiring. But eventually, they resorted to layoffs.
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