Kiprop (Buzeki) Bundotich, the founder and chairman of Buzeki Enterprises Limited, has announced the termination of 300 employees due to the escalating cost of fuel and the challenging business environment. The move comes as the company grapples with surging operating expenses, prompting a substantial reduction in its operations.
Buzeki, a prominent figure in the Kenyan business landscape since the establishment of Buzeki Enterprises Limited in 1999, cited the adverse effects of high fuel prices, exacerbated by the government’s decision to eliminate fuel subsidies during Kenyan President William Ruto’s administration.
He revealed that the logistics company began downsizing in response to the unprofitable conditions induced by the sharp increase in fuel prices. “We sent 300 staff packing. We still have some employed. Things are tough, and this is the truth… We parked trucks from Nov. 1, 2023, as the increase in fuel prices rendered the business unprofitable,” noted Buzeki.
VAT surge sparks cutbacks: Buzeki Industries reacts swiftly, phases out aging flee
The root cause of this downsizing can be traced back to June 2023 when Members of Parliament approved a significant hike in Value Added Tax (VAT) on fuel, doubling it from 8 percent to 16 percent.
This move led to an abrupt spike in fuel prices, affecting businesses across various sectors. Buzeki expressed that the rise in VAT compelled his company to undertake immediate downsizing, consigning all old trucks, including those with Euro 3 and below, to the scrapyard.
Buzeki Enterprises adapts to economic pressures with workforce reduction
A renowned player in the transport and logistics business across East and Central Africa, Buzeki Enterprises Limited, conceptualized by Buzeki in 1999 as a regional leader in the transport and logistics industry, had been a major employer in Kenya.
However, the recent layoffs depict a stark contrast to its previous stature, signaling the severe challenges posed by the harsh business environment induced by exorbitant fuel prices. The company, once a giant in the sector, now faces a more streamlined existence with only a fraction of its former workforce.
This disclosure by Buzeki underscores the widespread ramifications of the government’s fuel policy changes and the subsequent economic strain on businesses. The high-profile entrepreneur’s statement serves as a reminder of the intricate link between governmental policies, business operations, and their profound impact on employment and economic stability.