More CEOs plan job cuts on bad business performance

More business leaders are planning to trim their workforce this year, a new survey by the Central Bank of Kenya (CBK) shows.

The survey, which, cites declining business performance and cost-cutting measures for the mass layoffs, also shows that, in just five months, company executives in the non-banking sector have raised the number of jobs they plan to cut this year by more than 60,000.

This is after the CEOs and senior staff of 215 companies, in the survey conducted last month, indicated that the number of employees they “definitely won’t” retain in 2024 is 18 percent of the employees they had last year.

This is a rise from the planned layoffs of 15 percent of staff the companies employed last year, as indicated in a similar survey conducted in January.

“Non-bank respondents on the other hand expressed the need to cut costs and improve efficiency as reasons for not hiring in 2024. Some, however, expressed concern about industry decline as a result of the challenging business environment,” the CBK survey stated.

Non-bank private firms employed 2,073,600 persons last year, according to the Economic Survey, 2024. Eighteen percent of this translates to 373,248 jobs that company executives said would be shed off this year, an increase from 311,040 jobs (15 percent of the 2023 jobs), as per the January survey.

The number of jobs company executives in the non-banking sector are sure to retain this year has remained at a constant seven percent of jobs they had last year, while those they are sure won’t be retained has risen from 15 percent to 18 percent.

The growth in the number of employees non-bank companies say they “definitely won’t” retain in 2024 has been significant amid growing concerns of industry decline, high operating costs, and technological advancements.

The company executives also cited the need to reduce overheads, improve efficiencies, attract new talent, and expand businesses as other top reasons for their employment expectations for 2024.

The survey sought to find out from CEOs and other senior staff of 263 banks, micro-finance banks, and non-bank firms “about their expectations on the number of employees they expected to retain in 2024 compared with 2023.”

The survey, however, notes that banks have laid down strategies to hire additional staff this year, mainly to replace exiting staff, expand business, and attract new talent.

Read More: More CEOs plan job cuts on bad business performance

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