The Kenya Medical Supplies Authority (KEMSA) will lay off 200 employees from July 1.
Head of Public Service Felix Koskei said the move is aimed at saving the money which would have been used for salaries to be used for development.
"When we say that those who were in the contract will not be renewed, it is because we want to optimise for the sake of having enough money to develop this country," he said.
"Or else, all the monies will be in the pockets of employees and nothing will move."
The decision was arrived at, following the conclusion of the workers' auditing which took place some two weeks ago.
He further said the move will help improve the provision of services at Kemsa.
Koskei, who spoke on Thursday during a meeting at the Kemsa Ultra modern warehouse in Embakasi, added that the layoffs will also affect more ministries.
At the same time, he said the government has put into place measures to fight corruption in Kemsa, urging employees to avoid committing the vice.
"There is no call from above. You do it, you are alone. Responsibility is to individuals, not the institutions or a group of people or the department. You are on your own, you will face the consequences as an individual," he added.
He insisted that abuse of power and wastage of public resources will not be tolerated in the public service.
In attendance was PS State Department of Medical Services Harry Kimtai, KEMSA chair Irungu Nyakera and KEMSA acting CEO Andrew Mulwa.
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