Moi University has announced they will be terminating a number of employees as part of cost-cutting measures following the institution’s financial troubles.
In an internal memo published yesterday, the institution’s vice-chancellor, Isaac Kosgey noted the payroll bill, which has been rising, is now unsustainable.
According to the VC, the university’s pay bill currently consumes up to 70 per cent of the government-allocated capitation.
“With the continued decline of revenues, the university is unable to sustain the growing wage bill and, as such, it has become necessary to undertake right-sizing of the human resource to ensure the sustainability of the university and operations,” stated Kosgey.
The internal memo stated that its employees should be ready for some forced layoffs.
The facility reportedly employs at least 10,000 people.
“This is, therefore, to notify you of the impending redundancy of staff due to the continued strain by the university to fully fund its wage bill, and to align the human resource to the existing workload,” he stated.
The decrease also follows a Sh16.7 billion cut by the Treasury in June 2021 as a result of public universities failing to submit Sh34 billion in required deductions.
Ukuru Yattani, the Treasury Cabinet Secretary, claims that public universities still owed Sh34 billion in statutory deductions as of January 2021.
The International Monetary Fund had singled out public universities as a segment of the economy that needed to reduce spending, so the funding cut came as no surprise.
The Universities of Moi, Egerton, Technical University of Kenya, and Nairobi had the highest rates of remittance default bills.
As per the Auditor General’s report from 2020, the university had revenue of Sh7.8 billion for the fiscal year that ended in June 2020 and expenses of Sh8.3 billion, resulting in a deficit of Sh504 million.