Kenya’s Youth Bear the Brunt of Economic Downturn as Job Losses Mount
Kenya’s business landscape is facing unprecedented challenges, with young people suffering the most severe consequences as companies continue to shut down or downsize operations.
The Growing Job Crisis
Recent months have seen a worrying trend of businesses either leaving the country, reducing staff, or struggling to survive. This imbalance has created mounting concerns about shrinking employment opportunities for Kenyan youth.
Digital lending platform Tala recently announced layoffs of 28 customer service employees, citing improved loan repayment rates (over 95%) that reduced support needs. The company framed this as part of cost-cutting measures affecting less than 3% of its workforce.
This follows similar cuts by parent company InVenture Mobile Limited, which planned to lay off about 60 employees across departments. Meanwhile, a major vernacular TV station is reportedly letting go of 20 staff due to economic pressures and digital disruption.
Major Companies Exit Kenya
The job cut trend appears to be accelerating in 2025. Base Titanium, a key player in Kenya’s mining sector, announced plans to exit the country by mid-year, leaving nearly 2,000 miners unemployed as it shifts operations to Madagascar.
Similarly, CMC Motors Group began its gradual exit from East Africa earlier this year, citing tough market conditions, rising costs, and currency depreciation. These departures represent significant blows to Kenya’s employment landscape and tax base.
Economic Strain on Households
The economic pressure extends beyond the job market, affecting households nationwide. With many families relying on single incomes – or none at all – disposable incomes continue shrinking, making financial independence increasingly difficult for young adults.
In response, the Central Bank of Kenya recently lowered base lending rates, hoping to stimulate business lending and job creation. However, banks have been slow to adjust rates, and companies remain cautious about borrowing in the uncertain economic climate.
Policy Challenges
Compounding business challenges, Kenya’s high-tax environment continues to deter investment. A controversial proposal to remove VAT waivers for large investments (over Sh2 billion) risks further discouraging foreign direct investment when it’s needed most.
According to the Federation of Kenya Employers, while overall unemployment stands at 12.7%, youth (15-34 years) face a staggering 67% unemployment rate. About one million unskilled young people enter the labor market annually, exacerbating the crisis.
Experts warn Kenya must balance revenue generation with business-friendly policies to reverse this alarming trend and create sustainable employment opportunities for its youth.