Workers are staring at an uncertain future as more are yet to sink into un employment in a new wave attributed a tough operating environment.
Several listed companies have already announced that they expect their profits for this financial year to drop by at least 25 per cent, signaling tough times for employees.
Unga Group has been the first to announce redundancies in the coming weeks on account of reduced sales.
The firm says the performance, particularly for the Unga Limited business, has been below budget consistently, resulting in low capacity utilisation and high fixed costs that are no longer sustainable.
“We are actively continuing to explore alternatives to compulsory redundancies and, if this proves unavoidable, we will work hard to minimise the number of employees affected,” said Unga Group managing director Joseph Choge
According to the firm current assessment of the situation suggests compulsory redundancies affecting a maximum of fifty (50) employees in different locations and departments.
Choge added that currently the biggest challenge for many organisations is to remain financially viable from both a profitability and, more Importantly, cash flow perspective.
“We have worked on several initiatives to bring our costs In-line with anticipated business performance but, despite this, it has become apparent that we also need to restructure our organisation. This will result in loss of jobs,” added the managing director.
The situation has been so dire in the country with Federation of Kenyan employers estimating that 192 jobs are lost on a daily basis with 40 percent of employers threatening to reduce the number of employees to meet the increasing costs of operations.
In total FKE said that about 70,000 employees in the formal private sector lost their jobs between October 2022 and November 2023.
The outlook looks gloomy as several firms have already issued profit warnings, which may translate to cost cutting measures in future.
So far Kenya Airways, Crown Paint Kenya, Nation Media Group, Car & General, WPP Scan Group, Unga Group and Kenya Power have issued profit warnings.
