Kenyan company fires 1,000 staff amid economic challenges
In a blow to Mastermind Tobacco Kenya and its workforce, the company has announced the impending layoff of about 1,000 employees before the close of the year.
This drastic measure comes in the wake of the company’s closure in June 2023, triggered by a prolonged battle with the Kenya Revenue Authority (KRA) resulting in a substantial tax penalty.
Mastermind Tobacco Kenya found itself entangled in a protracted legal dispute with the KRA, culminating in a requirement to pay KSh 517 million in tax penalties.
The company succumbed to this financial burden, leading to the unfortunate decision to terminate the employment of 1,000 workers. The KRA’s stringent measures have been cited as the primary reason for the company’s closure, marking a critical juncture in its financial woes.
Under the receivership of I&M Bank, Mastermind Tobacco Kenya has faced a series of setbacks, including a substantial undisclosed debt that prevented the payment of employees’ salaries in 2018.
In 2019, the company lost a crucial tax case against the KRA, resulting in the forced sale of its top assets valued at KSh 2.9 billion. This cumulative financial strain contributed to the inevitable closure and subsequent job cuts.
Mastermind Tobacco Kenya joins the ranks of more than 75 other companies that have been liquidated in the past two years, indicative of the prevailing economic pressures faced by businesses in Kenya.
Established in 1987 as an indigenous firm, the company ultimately succumbed to the economic challenges that have led numerous enterprises to wind up their operations.
The news of the impending job cuts has garnered sympathy from the public, with many expressing concern for the affected employees and their families.
Social media platforms have become a space for Kenyans to share their thoughts, with sentiments ranging from empathy to frustration over government policies affecting businesses.
