Over 5,000 Kenyans lost jobs, 57 companies declared redundancies since 2022 - Report

The Federation of Kenyan Employers (FKE) has raised a red flag concerning the continuous raid of the pay slip by the government in efforts to raise more tax revenue to fund expenditure.

FKE says this could lead to social unrest as more salaried Kenyans feel disgruntled under mounting pressure to sustain their livelihoods with diminishing take-home pay.

The employers warn that Kenyans' take-home pay has been reduced to below the recommended one-third.

According to FKE, since the introduction of new taxes and deductions, employers are finding it difficult to comply with the rules, with some deducting more than the requirement by law.

"Clearly, if we continue raiding the pay slip, we will not have any income. So what will they do? They will have to keep borrowing; they will be distressed, and that eventually translates to social unrest. Then people begin to wonder what the value of being employed is. In our calculation, about 45 to 50 per cent of employees' salaries are going to tax and deductions,” FKE CEO Jacqueline Mugo said in a statement on Friday.

The employers further revealed that under the current administration, since 2022, close to 6,000 people have lost their jobs, with at least 57 companies announcing redundancies.

"In 2024, we had 202 companies declaring redundancies. In 2023, we had 11, and in 2022, the remaining. Out of this, from our membership, some 5,567 were affected. This is just an indication because these are just the numbers we get from our members. There are lots of other companies declaring redundancies,” said Mugo.

Additionally, the failure by both the county and national governments to meet their financial obligations to companies has forced them to cut down their workforce to reduce overheads, with pending bills now crossing the 1 trillion shillings mark. This issue is causing further distress to both employers and their employees.

"Overall, the pending bills are over Ksh.1 trillion. That’s a lot of money that is owed either to people who have rendered services to county governments or to State corporations, and we have been urging that these pending bills should be paid,” Mugo added.

Despite the challenges, FKE is optimistic that 2025 could mark the beginning of economic stabilization, provided key policy adjustments are made to alleviate the tax and regulatory pressures currently burdening businesses and employees.

The federation is calling on the government to enhance fiscal responsibility, reform tax policy, formalize the informal sector, and strengthen labour laws to raise more revenue.

The employers are cautioning the government against targeting the pay slip any further, noting that Kenyans do not have the capacity to sustain additional deductions on their salaries.