Job gloom envelops corporate India
A stumbling economy, a falling currency and high inflation, plus weak consumer demand, mean more and more become excess baggage
M Saraswathy, 20 August, 2013 Last Updated at 00:44 IST Mumbai
For P Ravikumar (name changed), the large office floor in the media house he worked for “looked like a post office last week”. From the glass walls of the conference room, he saw people hurriedly stamping large stacks of papers.
The next day, he was handed one of those papers, making his worst fears come true. Seven of his colleagues, also video journalists, were fired. “If all of us go looking for jobs, none of us might find one. There are hardly any jobs in the market anyway,” he says.
Network18 recently cut 350 jobs and more are expected to go in the coming days. This comes a few months after CNBC-TV18’s rival,NDTV Profit, scaled down its Mumbai operations drastically, resulting in at least 50 jobs being cut.
It’s not media alone — job losses have started becoming common across sectors. It has also hit those traditionally known as stable industries. Educomp Solutions, an education service provider, slashed 3,500 jobs in the past three months, truncating its workforce by almost 20 per cent.
The automobile industry isn’t far behind. Last month, Mahindra & Mahindra laid off 500 temporary workers at its factory sites. As sales went down, the company also announced production holidays to avoid inventory pile-up and to align with slowing demand. “We have reduced temporary workers due to the prevailing situation within the auto industry,” a company spokesperson said.
Siemens laid off a little over 200 employees across various units in the country. It is known to have plans to dismiss 400 more. Like many of its peers in the capital goods sector, it has been getting fewer orders, as capital expenditure across manufacturing and other industries reduced in recent years. “As part of the global operations of Siemens, in India, too, we regularly reassess and consequently realign capacities,” a spokesperson said.
From a company’s perspective, job cuts are a necessary pain. Stuck in the midst of a slowing economy, organisations want to chug ahead with lesser burden on their backs. “Today, when the economic environment poses a challenge to the education sector as a whole, I am proud that Educomp has embarked on a bold strategy to return the company to robust growth. Although this transition will not be painless, we have to do what we have to do to get growth back on tracks,” said Shantanu Prakash, chairman and managing director of Educomp Solutions.
However, for employees at the receiving end, living with the fear of a possible job loss is like slow poisoning. Partha Ghosh, 38, in charge of business operations at a technology solutions company, said it was a “painful” exit, for him and colleagues who’d spent a little more than 20 years in the company.
Abhishek Sood (name changed), a 27-year-old management graduate who recently was told to find another job by a lubricants company, complains they should have clearly said it was a part of their strategy. “We (him and some others) were told that we required to find another job, as the company was removing ‘unproductive’ employees. However, the truth is that the company is downsizing to cut losses. Such excuses bring down our morale even further, especially since we know we performed to the best of our ability,” he says. An MBA from a leading management institute, he’s now employed in a managerial position with a large real estate firm.
Infrastructure companies, one of the worst hits in the slowdown, say if the order book continues to be dismal for a couple of more quarters, they would have no option other than job cuts.
Sunil Goel, director of human resource firm GlobalHunt, said it was a natural reaction, as the Indian economy had not been performing well. “The emphasis is on right-sizing and cost optimisation among companies,” he said.
The troubles of 2013 are the second slowdown phase in the past five years. This time, a dip in the economy comes along with a sharp depreciation in the rupee, a massive current account deficit, inflation and a fall in industrial production, with weak consumer demand.
“Unlike in 2008, this will be more gradual and a planned process. While a lot of job cuts are being seen in areas like media and communication and automobiles, we expect sectors like retail will also be affected,” predicted Goel.
Companies which are not dismissing employees are faced with another issue, the influx of resumes. “With the number of CVs I have with me right now, I can open my own executive search firm,” said the personnel head of a diversified group. The group has no plans of hiring more hands.