Job cuts increase as harsh operating conditions bite

Sacked employee

The harsh economic times in the country has forced many firms to layoff staff as a cost-cutting measure.

Photo credit: Shutterstock

What you need to know:

  • In an internal memo, Unga Group said tough economic times in the country had seen their volumes and margins dip to unsustainable lows.
  • Two weeks ago, CIC Group announced a target of cutting up to 75 jobs through a mix of the voluntary exit programme and redundancies.

At least seven Kenyan super-league firms have issued redundancy notices or effected mass staff layoffs since the beginning of this year, in a period marked with turbulences and a repetitively disruptive operating environment.

Listed food processor Unga Group, which has announced plans to axe up to 50 workers from its ranks, is the latest to join the growing list that also includes Twiga Foods, De La Rue, Stanchart, CIC Group, Ashton Apparel (EPZ) Ltd and Mombasa Apparel (EPZ) Ltd.

In an internal memo issued to staff last week, Unga Group blamed tough economic times in the country, which it said had seen the volumes and margins dip to unsustainable lows, adding that its cost-cutting initiatives had thus far proved unfruitful.


“Currently, the biggest challenge for many organisations is to remain financially viable from both a profitability and a cash flow perspective. Unga is no exception. 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,” the firm said.

A fortnight earlier, CIC Group had announced a target of cutting up to 75 jobs (10 per cent of the workforce) through a mix of the voluntary exit programme and redundancies as it moved to adopt a leaner structure powered by technology.

In September, weeks before the CIC communique, two EPZ firms that included Ashton Apparel and Mombasa Apparel (rumored to be owned by a single investor) announced plans of mass sackings that would see up to 7,850 employees laid off after an asset transfer agreement was reached between them and Gokaldas Exports Limited.

At the time, the pair informed employees that upon the transfer of the assets, Gokaldas would issue employment contracts on its letterhead to staff based on business requirements.

Cost-cutting drive

In August, agri-tech firm Twiga Foods issued redundancy notices to over 250 members of its workforce in a cost-cutting drive, coming just a month after banknote printer De La Rue announced the spending of Sh2.7 billion in laying off staff and paying lawyers as well as writing off assets as it closed down operations at its Nairobi unit due to low currency and cheques printing business.

Standard Chartered Bank Kenya, had in May disclosed in its annual report that it had spent Sh209.96 million to trim its staff number by 59 to 1,061, marking the eighth straight year of slashing its workforce.

Findings of a Stanbic Bank Kenya’s Purchasing Managers Index (PMI) indicate that Kenya’s unemployment crisis deepened to levels last seen at the peak of the Covid-19 pandemic in October this year, with corporate managers stating that the job cuts were in response to flagging sales, which prompted a further downscaling of output levels.