Government freezes hiring, contract renewals across 42 state corporations amid restructuring plans
Koskei also suspended “any ongoing recruitment processes of staff in any cadre,” and blocked approval or implementation of any new human resource policies or changes in personnel benefits.
Hundreds of workers, including top executives, are staring at job uncertainty after the government froze all new hiring and contract renewals across 42 state corporations lined up for restructuring.
In a memo, Chief of Staff Felix Koskei ordered an immediate moratorium on recruitment, contract extensions, salary reviews, and capital projects in the affected agencies.
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The directive is part of President William Ruto’s sweeping reforms targeting state corporations, the most extensive attempt yet to overhaul the sector.
“A moratorium is issued on the recruitment and renewal of contracts for chief executive officers or any other officers serving on contract terms at the lapse of their current tenure,” the memo reads.
Koskei also suspended “any ongoing recruitment processes of staff in any cadre,” and blocked approval or implementation of any new human resource policies or changes in personnel benefits.
Adjustments to salary structures and the launch of new capital projects have also been halted.
“It is hereby directed that the following measures shall be undertaken in the state corporations identified,” Koskei said.
The freeze follows a January Cabinet decision to merge, dissolve, and restructure dozens of parastatals.
Under the plan, 42 corporations will be merged into 20 entities, 25 will be dissolved and their functions taken over by ministries or other agencies, while 13 professional bodies will no longer be classified as state corporations.
Some of the key mergers include the consolidation of the Kenya Urban Roads Authority and the Kenya Rural Roads Authority into a single roads management body.
Three water regulators—the Water Services Regulatory Board, the Water Regulatory Authority, and the Regional Centre on Groundwater Resources, Education, Training and Research—will also be merged.
Others affected include the Uwezo Fund, Women Enterprise Fund, and Youth Enterprise Fund, which will be brought under a single financing agency.
The Kenya National Trading Corporation and National Cereals and Produce Board have also been merged.
Four state funds were returned to their parent ministries, and six agencies were marked for mandate alignment as part of the restructuring.
With most government staff now employed on contract, under a policy adopted five years ago to boost performance and manage costs, the freeze is expected to impact a significant portion of the workforce. At least 3,100 employees across the affected agencies could be affected by the changes.
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