Kenya’s business sector is currently grappling with a wave of mass layoffs and company closures, leaving thousands of employees uncertain about their future.
The latest casualty is Directline Assurance, a company owned by billionaire S.K. Macharia, which has been forced to shut down due to Unfavourable business landscape and tough competion.
Directline Assurance, which enjoyed a 60% market share, has been struggling to recover from financial losses. The company’s closure will result in significant job losses, further exacerbating the already fragile employment landscape in Kenya.
This development comes on the heels of other high-profile company closures and layoffs. Gro Intelligence, a Kenyan and US-based agricultural insights platform, announced its plans to shut down just three months after slashing its headcount by 60%.
The company, which raised $117 million since its launch in 2012, was unable to secure sufficient capital to stay in business.
Another recent casualty is Copia Global, a Kenyan e-commerce startup and fintech platform. The company is facing financial struggles and is considering mass layoffs and a potential shutdown of operations.
Copia Global, which has raised over USD 120 million, has been struggling to navigate the prevailing financial constraints and has been transparent about the uncertainties it faces.
The layoffs and closures are attributed to a combination of factors, including the global capital market downturn, high interest rates, unpredictable market conditions, and government policies.
The Federation of Kenya Employers (FKE) has warned that the increasing cost of production in the country will lead to mass layoffs, with 40% of employers planning to reduce their workforce to meet the rising costs.
The FKE has called on the government to stabilize the business environment by introducing policies that promote long-term prosperity rather than short-term revenue targets.
The lobby group has also urged the government to review taxes and the increased value added tax on fuel to mitigate the impact on businesses.
Majority of companies are quoting hard business environment due to the comming tax laws in the Finance bill 2024.
Kenya’s business landscape is facing significant challenges, with many companies struggling to stay afloat.
The recent developments highlight the need for a more supportive business environment and effective policies to promote economic growth and job creation.
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