604 companies countrywide have declared their employees redundant following the negative effects of COVID -19 on businesses according to the Ministry of Labour and Social Protection data.
At the same time, the Federation of Kenya Employers (FKE) said that every modern sector company in Kenya has lost at least 33 jobs on average due to the impacts of the Covid-19 pandemic.
The Kenya National Bureau of Statistics (KNBS) estimates at least 1.7 million jobs having been lost at the national level. However, the FKE says that that’s just a conservative figure and that a lot more jobs that might have not been weren’t recorded were lost.
The report by KNBS shows that 83.6 percent of the total workforce in Kenya comprises informal workers, who according to stats have been hit hard by the pandemic following indefinite company closures.
According to Ms. Mugo, last year alone FKE member companies declared 7,000 employees redundant, arising from various issues, among them mergers and acquisitions, change in the regulatory environment in the transport and education sector.
The FKE says that even before Covid-19, it had already raised an alarm that companies were under stress and jobs were being lost however, COVID-19 escalated the situation. According to the most recent FKE survey, the mean number of employees per organization was 405 as of February 29, 2020. This dropped to 372 employees as of August 1, 2020.
“To date, 60 of our member companies have declared redundancies because of poor business performance occasioned by the effects of COVID-19. For instance, reduced demand for goods and services,” Ms. Mugo said.
“In addition to rising unemployment, global underemployment has also seen a substantial increase as businesses are forced to reduce work for their employees in order to minimize costs or losses as well as to observe government directives,” Ms. Mugo added.
With the outbreak of the COVID-19 pandemic, several companies saw the laying off of almost their entire staff inevitable following continued decline in business. More companies are still laying off employees as the pandemic continues to bite harder.