Kenyan Businesses Cut Jobs After 15 Months of Growth

Kenyan businesses cut jobs in May for the first time in 15 months, reversing continuous job creation as weakening demand and rising costs spill into the labor market. Private sector firms reduced staffing levels, with many citing cuts to temporary contract workers amid deteriorating business conditions.

The headline PMI fell to 46.6 in May from 49.4, remaining below the 50-point threshold that separates expansion from contraction. New orders declined for the third straight month at the fastest pace since July 2025, while output contracted for the third consecutive month.

Economists attribute the slowdown to consumer resistance to spending, rising costs, and week-long transportation protests that constrained business activity. About 99% of participating businesses reported no change in staff costs, suggesting companies are preserving cash through salary freezes while managing higher operating expenses.

Despite the contraction, Kenyan firms remain optimistic about the year ahead, with business confidence reaching its highest level since February 2023. Companies expect stronger activity supported by investments in advertising, product diversification, and digital sales channels.

SOURCE: https://techcabal.com/2026/06/08/kenyan-companies-cut-jobs-weaker-demand/