Unga Group to fire 50 workers over tough economic times: “Costs are no longer sustainable”

Unga Group has announced plans to fire 50 employees in different locations and departments, saying the cost of doing business is not sustainable.

In an internal notice to employees, the company stated, “Our volumes & margins are down. Our sales particularly for Unga Limited business have been below budget consistently resulting in low capacity utilisation and high fixed costs that are no longer sustainable.”

The company also mentioned that “We have worked on several initiatives to bring our costs in line with anticipated business performance but, despite this, it has become apparent that we also need to restructure our organization. This will result in loss of jobs.”

Unga Holding Limited consists of two entities Unga Limited and Unga Farm Care (EA) Limited

Unga Limited is known for its popular brands like Exe wheat flour, Hostess maize flour, Famila porridge flour, and has recently ventured into selling sugar under the Amana brand. The company also sells foods like beans, pishori rice, and green grams under its Amana range.

More layoffs awaiting employees in Kenya

This comes as a report by the Federation of Kenya Employers (FKE) projected a further 40% job cuts after the laying off 70,000 workers in the past one year over high taxation.  This has been attributed to the rising cost of doing business in the country.

The layoffs occurred between October 2022 and November 2023 according to the federation. FKE Chief Executive Jacqueline Mugo blames the high cost of doing business on the implementation of the Finance Act 2023. Moreover, the weakening of the shilling against the dollar has made the situation worse and has hit hard import-dependent firms.

Mugo said,  “The employers’ view is that the changes have had an overall negative impact on cash flows and the financial positions of enterprises in various ways: Direct impact on the payroll, impact on demand for General Wages review, risk of business closure and increased laying off employees.”

As this happens, the FKE has reported that employers are dealing with a situation where potential employees lack the skills needed for the jobs they are interested in, urging job seekers to broaden their skill sets instead of sticking to only what they studied in institutions of higher learning.