The business environment is going through a rough patch, and the effects are hitting young people the hardest, as companies shut down every other day. 

While a few companies are trying to set up shop or scale up operations, the reality is that more businesses are either leaving the country, downsizing or struggling to stay afloat.

This imbalance has created a growing concern about job losses and the shrinking opportunities available to Kenyan youth.  

Recently, Tala, a digital lending platform popular with many Kenyans, announced it was letting go of 28 employees in its Customer Service department. 

The company explained that most of its customers are now repaying their loans on time, reducing the need for such a large support team. It said the move was catalysed by the more than 95 per cent loan rate performance.

“This represents less than three per cent of Tala’s workforce, and Tala shall redirect these resources towards market expansion and product development. We recognise transitions like this impact our employees, and we are committed to supporting them through this process with dignity,” the company said in a statement. 

Tala termed the move as part of a broader cost-cutting and resource reallocation strategy, saying the affected staff represented less than 3 per cent of its total workforce.

However, this comes after its parent company, InVenture Mobile Limited, had already planned to lay off around 60 employees from several departments, citing a drop in customer interactions. 

A popular vernacular TV station is reportedly laying off about 20 workers due to economic pressures and shifting viewer habits driven by digital media.

One affected employee expressed deep disappointment, saying their entire department had been notified to pack up by the end of the month.

“This is the only month that we will be working at the organisation, meaning that by the end of this month, we should be packing. The company has less staff but still the organisation decided to reduce more people,” the source said downheartedly.  

With fewer hands on deck, those left behind are likely to experience burnout and increased mental strain as they try to meet demanding newsroom deadlines. 

Exiting the country 

The trend of job cuts isn’t new, but it appears to be accelerating in 2025.

Base Titanium, a major player in Kenya’s mining sector and part of the Australian-based Base Resources, announced it would be exiting the country by mid-year. By June, nearly 2,000 Kenyans, most of them miners, will be jobless. 

Base Titanium says it’s moving its investment to Madagascar, where it plans to start exporting minerals by 2027. While they’ve set aside close to Sh1 billion to compensate workers, the impact of their departure extends beyond jobs. 

Although the company stated that it has set aside $7.7 million (Sh993.3 million) for the compensation of the staff who will be affected in the process, the impact is far-reaching as the country at large would be missing out big time on revenue collection as it accounts for 65 per cent of Kenya’s mining industry by mineral output value. 

Similarly, CMC Motors Group declared its gradual exit from East Africa earlier this year, blaming tough market conditions, rising costs, and currency depreciation. 

All these factors signal bigger trouble for a job market already under pressure. For young Kenyans, especially recent graduates, the hope of securing a decent job seems like a far-off dream. 

This economic strain is also being felt in households across the country. With many families depending on a single source of income—or none at all—disposable incomes are shrinking.

This makes it harder for young adults to become financially independent or support their families.

In response, the Central Bank of Kenya (CBK) recently lowered the base lending rate, hoping that it will encourage banks to offer more affordable loans to businesses.

CBK Governor Kamau Thugge stated that the move should eventually help the private sector expand and create more jobs. 

“With the revision, we expect to see more access to affordable credit by the private sector, which in turn will help in the creation of job opportunities and flow of cash in the economy,” he said post the Monetary Policy Committee (MPC) meeting last week.  

But for now, this remains a long-term goal. Many banks have yet to follow suit, and companies are still cautious about taking on new loans in an uncertain economy.

Adding to the business challenges is Kenya’s high tax environment.

The cost of running a business in the country continues to rise, and government policy changes aren’t helping.  

Making investments 

For instance, the National Treasury has proposed removing the VAT waiver for companies making investments of over Sh2 billion.

While the idea is to increase tax revenues without raising new taxes for the public, it risks discouraging large-scale investors who were once attracted by the incentives.

Joseph Ngugi, a senior official in the ministry, defended the move before Parliament’s Finance Committee, saying it was necessary for the government to meet its revenue targets. But with fewer incentives, FDI may continue to slow down, worsening the job crisis. 

All these developments reflect a worrying trend: More companies are leaving or reducing their footprint in Kenya than those entering or expanding. For a country with a young population and high unemployment rate, especially among the youth, this pattern is alarming. 

To turn things around, Kenya needs policies that not only attract new businesses but also support the ones already here. It must find a balance between raising revenue and creating an environment where companies can grow, thrive, and, most importantly, hire more people.  

According to the Federation of Kenya Employers (FKE), although the overall unemployment in Kenya is at 12.7 per cent, youth (15-34-year olds), who form 35 per cent of the Kenyan population, have the highest unemployment rate of 67 per cent.  

Over one million young people, it adds, enter into the labour market annually without any skills some having either dropped out of school or completed school and not enrolled in any college.