Bleak outlook as CBK reveals one in three firms won’t hire in 2025
Data from the Kenya National Bureau of Statistics shows that 782,300 new jobs were created in 2024, a drop from 848,100 the year before.
Most firms across Kenya have frozen their hiring plans for 2025, citing increased operational costs, delayed government payments, high taxes, and a shift to automation as key reasons for halting workforce expansion.
This is according to a Central Bank of Kenya (CBK) market expectations survey targeting 37 banks and 302 non-banking firms, including those in manufacturing and hospitality, which shows that 34 per cent of non-bank companies have ruled out hiring this year.
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“Non-bank players had mixed expectations about hiring in 2025. Thirty-four per cent of the respondents indicated that they would not hire due to rising operational costs, increased taxes and levies, delayed government payments, and plans to leverage ICT to reduce manual operations,” said CBK in the survey.
The hiring freeze is a blow to job seekers in an economy already under pressure. While some firms are still open to hiring, they are in the minority.
Only 34 per cent of the surveyed businesses said they would hire in 2025, mainly to support business expansion, replace existing staff, or attract new talent.
Among banks, the hiring outlook was more positive, with 44 per cent of institutions saying they would “definitely” expand their workforce due to ongoing branch expansion, the adoption of digital strategies, and staff replacement needs.
Despite this optimism from the banking sector, the broader labour outlook remains cautious. The CBK survey echoes earlier findings that indicate weakened demand across several sectors, with manufacturing highlighted as one of the most affected.
The trend points to limited job creation as companies look to manage costs and increase efficiency through automation and digital transformation.
The slow pace of hiring is happening even as data from the Kenya National Bureau of Statistics shows that 782,300 new jobs were created in 2024, a drop from 848,100 the year before.
The majority of these, around 90 per cent, were in the informal sector, which offers limited job security and benefits.
The current business environment is making it difficult for firms to justify expanding their workforce.
The high cost of doing business, combined with efforts to reduce manual operations through ICT, has led many to freeze hiring and focus on surviving the tough economic climate.
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