253,544 jobs lost amid recovery from Covid-19

jacqueline mugo

Federation of Kenyan Employers Executive Director Jacqueline Mugo. FILE PHOTO | NMG

About 253,500 jobs were shed in the three months to March despite the economy showing signs of recovery from Covid-19 hardships, with employees aged below 25 and those above 40 bearing the brunt of the layoffs.

Data from the Kenya National Bureau of Statistics (KNBS) shows the number of people in employment fell to 17.84 million between January and end of March compared to 18.09 million the previous quarter.

Young people below the age of 25, mainly secondary school and college graduates, were the hardest hit by job cuts in an economic setting that is plagued by reduced hiring on the back of sluggish corporate earnings.

About 292,020 jobs held by workers below 25 years were lost in the quarter ended March as employers recovering from Covid-19 economic fallouts hired 176,325 workers between 25 and 40 years—mostly fresh university graduates.

This is a major blow to jobseekers, especially the more than one million young people who graduate from colleges and secondary schools in search of low-cadre positions like clerks.

“People are looking for workforce who they can develop but who are not so costly to fill the gaps as they create new models to survive during these tough times. The older bend are experienced but are more expensive,” Federation of Kenya Employers executive director Jacqueline Mugo told the Business Daily.

“If you look at this segment being employed they have some skills but they are not so green so you can develop them over time.”

About 149,897 jobs held by workers aged between 40 and 60 were let go as companies reinvented themselves to survive the aftershocks of the Covid-19 pandemic and sought to cut expenses on specialised older workforce.

This is an indication that corporate Kenya was not keen to keep experienced, but costly staff as firms raced to preserve cash amid flat sales.

The Quarterly Labour Force Survey indicates that nearly 2.495 million people were jobless at the end of March, up from 2.2944 million in the same month last year — when Kenya reported its first case of Covid-19.

This reflects significant business disruptions in the wake of the pandemic, which triggered losses and closure of firms, especially small enterprises.

The government defines the unemployed as people who do not have a job and have actively been looking for employment in recent weeks, leaving out those who have given up on landing work.

Under this definition, the government puts the number of unemployed Kenyans at 1,264,333, which is 31 percent higher than the 961,666 captured in the quarter ended March last year.

Nearly 730,000 jobs were lost in last year when Kenya imposed coronavirus-induced lockdowns that led to layoffs and pay cuts.

At 253,544, it means the economy shed nearly a third of the positions lost last year in the three months to March.

The jobs report reflected a grim period for workers and businesses, indicating the employment market is trailing the ongoing economic recovery.

The World Bank expects Kenya’s economy to grow by 4.5 percent this year, as vaccinations and easing of restrictions help it recover from a coronavirus-induced slump last year. But it still remains highly vulnerable to the pandemic.

The economy contracted 0.3 percent last year.

Growth is expected to climb to above five percent in the subsequent two years, the bank said in a biannual report.

The projection for this year’s growth is based on firms boosting production and investments as lockdown measures are lifted, a slight recovery in the services sector due to vaccinations, and adequate crop harvests, the bank said.

Evidence of mounting job losses looks set to pile pressure on the State and policymakers to do more to prevent mass unemployment.

Business groups are calling for targeted cuts in employers’ taxes and retention of subsidies to boost hiring — proposals that the Treasury has resisted as it searches for more revenues.