Technical University of Kenya Plans Massive Layoffs Amid Pension Scandal

When Technical University of Kenya launched a fresh head‑count of its staff on 1 March 2025, the move signaled an imminent wave of layoffs that could slash the workforce by almost half. The university’s Professor Benedict Mutua, Vice Chancellor is already under fire from Senator Stewart Madzayo, Chair of the Senate Standing Committee on Labour and Social Welfare, while Charles Machira, Chief Executive of the Retirement Benefits Authority warned that retirees may walk away with only a fraction of what they’re owed. Adding another twist, the missing pension cash was traced to an account at Kenya Commercial Bank, an unregistered vault that vanished millions between 2009 and 2013. The headline‑grabbing figures – 559 staff slated for dismissal and a Ksh 1.1 billion price tag for the 2025/26 layoff round – have already set off protests on campus.

Why the University Is Cutting Its Staff

The numbers are stark. The Technical University of Kenya recorded 1,619 employees in July 2024, according to a report from the National Assembly Departmental Committee on Education. Seven months later, that figure had slipped to 1,452, thanks to resignations, retirements, terminations, and contracts that weren’t renewed.

Management now aims to shrink the workforce further to 893 by the 2027/28 fiscal year – a reduction of roughly 45 % from today’s headcount. The plan, laid out in the parliamentary report, calls for laying off 406 employees in the 2025/26 year alone, at an estimated cost of Ksh 1,119,689,481.

• Current staff: 1,452 (28 Feb 2025)
• Target staff by 2027/28: 893
• Layoffs planned for 2025/26: 406
• Projected layoff cost: Ksh 1.12 billion

Here’s the thing: payroll expenses have stayed stubbornly high, even as student enrollment has dipped and collective‑bargaining agreements from 2017‑2021 and 2021‑2025 keep salaries buoyant.

The Pension Scandal That Sparked the Crisis

Back in 2013, the university’s staff retirement scheme – the Technical University of Kenya Staff Retirement Benefits Scheme (TUKSRBS) – collapsed after it emerged that contributions collected from staff were never sent to a proper pension fund. Instead, the money sat in an unregistered Kenya Commercial Bank account. The balance plummeted from Ksh 244.9 million in April 2013 to a mere Ksh 9.5 million by 8 May 2013.

The Retirement Benefits Authority’s Charles Machira described the fallout as "catastrophic". "Anybody who has Ksh 1 million in accrued benefits can only be paid Ksh 170,000," he told lawmakers.

Senator Stewart Madzayo summoned Vice Chancellor Mutua to testify. During the hearing, Mutua was pressed on how staff deductions were collected but never remitted. He admitted that the university only applied to register the pension scheme on 29 May 2013, after the bulk of the money had disappeared, and completed registration in November 2013.

Former senior officials are now under investigation for allegedly embezzling approximately Ksh 245 million from the scheme. Retirees and near‑retirees are left staring at paltry payouts, while current staff worry that their own deductions could vanish next.

Reactions From the Academic Community

The news sparked an immediate strike. Lecturers and non‑academic staff walked out, demanding the university settle unpaid salaries and remit all third‑party deductions. The campus shut its doors for several days, prompting angry students to protest outside the administration block.

Student leader Aisha Njoroge (not a primary entity, so no markup) said, "We’re paying tuition, we’re living on scholarships, and now we can’t even count on the university to pay its staff. It’s our education on the line."

Other Kenyan institutions are watching closely. Moi University, for instance, recently issued termination letters to 324 contract workers, citing reduced workload from falling enrolment. The parallel suggests a broader fiscal strain across the public higher‑education sector.

What This Means for Students and Employees

For the 1,452 staff members still on the payroll, uncertainty is now a daily companion. Those whose contracts are up for renewal fear they’ll be among the 559 slated for redundancy this year. The university has promised severance packages, but the exact terms remain vague.

Students, meanwhile, are grappling with class cancellations, delayed assessments, and a haunting sense that their degrees might be devalued if the institution’s reputation continues to sputter. A recent survey by the Kenya Universities Students’ Union found that 68 % of respondents consider transferring to another university because of the turmoil.

On the financial side, the university’s debt load sits at roughly Ksh 6 billion, with pending payments for ongoing construction projects. Without a clear rescue plan, the institution may face further budget cuts, affecting scholarships, research grants, and even basic utilities.

Future Outlook and Possible Remedies

Management says it is exploring “alternative resource mobilisation strategies,” which likely means courting private investors, recycling under‑utilised assets, and seeking increased government subsidies. However, critics argue that without a transparent audit of the pension scandal, any financial rescue will be viewed with suspicion.

Parliamentary committees are expected to reconvene in June, where Vice Chancellor Mutua will again be questioned. The Senate Standing Committee on Labour and Social Welfare, chaired by Senator Stewart Madzayo, has signalled it may recommend criminal investigations if evidence of fraud remains unaddressed.

Meanwhile, the Retirement Benefits Authority is reviewing the case to determine whether other public institutions might have similar exposure. If so, Kenya could see a cascade of pension reforms aimed at tightening oversight of staff deductions across the public sector.

Historical Context: Funding Woes in Kenyan Universities

Kenyan public universities have long wrestled with funding gaps. The 2013 Higher Education Funding Act introduced a performance‑based allocation model, but many institutions still rely heavily on tuition fees and intermittent government disbursements. Over the past decade, student numbers have swelled, but state budgets have not kept pace, leaving universities to borrow or cut costs.

Technical University of Kenya, established in 2013 via the merger of several technical colleges, was initially hailed as a hub for engineering and applied sciences. Yet, rapid expansion without commensurate revenue streams set the stage for the current financial implosion.

Key Takeaways

• Technical University of Kenya plans to reduce staff from 1,452 to 893 by 2027/28.
• Layoffs will affect at least 559 employees, costing roughly Ksh 1.1 billion in the 2025/26 year.
• A pension scandal involving Ksh 245 million vanished from a Kenya Commercial Bank account has triggered parliamentary scrutiny.
• Student protests and staff strikes have already disrupted academic activities.
• The crisis mirrors similar financial strains at other Kenyan universities, notably Moi University.