Kenyan EPZ Company Starts Firing 1,900 Employees

The affected employees were primarily on seasonal contracts that expired on March 25, 2024, leading to the laying off of the staffers.

Kenyan EPZ Company Starts Firing 1,900 Employees
Long queues of job seekers in their hundreds wait to hand in their documents at county hall in Nairobi, Kenya. /NATION MEDIA GROUP

An Export Processing Zone (EPZ) in Mombasa County has begun to lay off a section of its workforce following its announcement issued earlier in April.

Ashton Mombasa Apparel EPZ Limited (AMA), in a statement sent to Viral Tea, announced that the move to cut down the number of its employees, close to 2,000 is in response to a significant reduction in contract orders from its valued customers.

The affected employees were primarily on seasonal contracts that expired on March 25, 2024, leading to the laying off of the staffers.

"While the majority of our workforce, almost 10,700, has had their contracts extended despite major reductions in our customers' orders, regrettably, we could not extend contracts for some of our employees due to prevailing business conditions," read the statement in part.

Workers at an EPZ factory. /FILE

"As a responsible employer, AMA is committed to fulfilling all contractual obligations to the affected employees, in line with the Kenyan Employment Act."

The EPZ announced that all dues will be settled per the terms outlined in their contracts.

AMA however noted that the decision is solely driven by the current business needs, which necessitate a reduction of about 1,900 employees to align with the reduced demand from its customers.

"We deeply value the contributions of all our employees, and this decision was not made lightly. While we understand the impact, this may have on the affected individuals, we remain hopeful that business conditions will improve in the future.

"Should there be a resurgence in demand and an improvement in our operational requirements, we will prioritize rehiring staff accordingly," added the statement.

A source privy to the matter who spoke to Viral Tea revealed that the firing exercise had already begun, with the affected employees instructed not to report as of April 1.

The development only worsens the job crisis affecting the country, with more Kenyans projected to lose their jobs after over 190 company managers revealed plans to reduce their workforce within the next three months.

In the Chief Executive Officers (CEOs) survey that was recently conducted by the Central Bank of Kenya (CBK) among 1,000 company bosses across several sectors of the economy, the layoff will be informed by the high cost of doing business.

Particularly, 197 bosses noted that the layoffs would be necessary as they move to tame the cost of doing business which has also been occasioned by high taxation and poor purchasing power among Kenyans.

On the other hand, Kenyans who are seeking employment could still have to wait for longer given that 636 CEOs revealed that they would be maintaining their workforce. Only 168 bosses noted that they would be employing new staff to join their current workforce.

The Federation of Kenya Employers (FKE) on November 24, 2023, warned that millions of Kenyans risk losing their jobs in the future if the cost of doing business continues to be unsustainable due to high taxes that have emerged since the enactment and implementation of the Finance Act 2023.

It revealed that daily, it receives notifications from employers regarding their intent to declare redundancy, adding that between October 2022 and November 2023, 70,000 jobs were lost in the formal private sector, according to a survey FKE undertook to determine the impact of the increased costs on jobs.

Job seekers queuing for interviews in Nairobi. /THE EAST AFRICAN