Scangroup Fires Over 100 Employees Amid Harsh Kenyan Economic Times

• WPP Scangroup sacked 102 employees as it sought to cut costs amid harsh economic times worsened by high taxation
• In its latest annual report, the firm revealed it declared 15% of its workforce redundant, including 16 permanent staff
• FX Pesa lead market analyst Rufas Kamau opined that the Finance Act 2023 introduced a raft of taxes that were hurting businesses

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

Over 100 Kenyans have lost their jobs after WPP Scangroup, a listed marketing services firm, declared their positions redundant.

How many employees did Scangroup sack?

The company sacked 102 employees as it sought to cut costs amid harsh economic times worsened by high taxation.

In its latest annual report, the firm declared 15% of its workforce redundant in 2023 as it sought to cut costs.

"In 2023, we continued to progress towards our goal of building a future fit organisation by streamlining the workforce and investing in new talents and skills. We exited 15% of the workforce via redundancy in May as a result of the exercise," WPP Scangroup stated.

Following the latest job cuts, the company's workforce reduced from 554 to 452. It sent home 16 permanent staff and 86 on contract.

The company had in 2020 laid off 157 workers after the COVID-19 pandemic disrupted business operations.

Why are companies sending home employees?

FX Pesa lead market analyst Rufas Kamau opined that the Finance Act 2023 introduced a raft of taxes hurting businesses.

As a result, companies resorted to cutting costs by firing hundreds of staff.

"The current administration's progress is changing tax policy rapidly, mismanaging the currency and weakening economic growth. The taxes will end up hurting the tax base. Foreigners will exit and invest in other countries. By the time we realise that tax revenues are lower and go for the eventual repealing, the tax base will have shrunk," Kamau told TUKO.co.ke.

Which other Kenyan companies fired staff?

Mastermind Tobacco announced more than 1,000 job cuts in December 2023.

The cigarette manufacturer faced liquidity challenges after losing a tax case against the Kenya Revenue Authority (KRA).

In May 2023, over 100 sales agents lost their jobs at agri-tech firm Twiga Foods.

In August 2023, it announced another round of employee layoffs as it sought to cut its operational costs.

Proofreading by Asher Omondi, current affairs journalist and copy editor at TUKO.co.ke.