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Rise in digital economy contributing to job losses

Author: Fredrick Obura, Standard Digital (Kenya), Published on: 13 August 2019

"Tough time as Kenyan companies plan mass job cuts"

The wave of lay-offs has hit Kenyan companies once again with more than four firms spelling intentions of getting rid of hundreds of workers before the end of the year...Some analysts attribute the layoff wave to the high cost of labour and production as well as mass adoption of technology. “The cost of labour in this country is very high and that means that if companies cannot rejig their businesses to be more efficient they are going to go down, to avoid going down, the first place to look at basically is how to reduce the labour cost,” says Patrick Obath, Kenya Private Sector Alliance trustee.

...“A lot of companies are also going digital and buying various innovations most of which are now being developed locally; the innovations carry a lot of efficiencies leading to redundancies in some jobs,” he says. He added that the technology wave means many people are going to lose their jobs and forced to rethink their careers and at times, it will call for retraining to fit into the digital economy that Kenya is fast-moving to. Stanbic bank plans to part ways with around 255 employees in a voluntary retirement package plan. “The voluntary early retirement is an outcome of a clear strategy, where we are looking at how to become in the business that we run. But also as digitise, and become more digital it means some functions will have to be re-organised as a result,” said Stanbic Bank Kenya Chief Executive Charles Mudiwa.

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