With financial stress mounting, India’s established corporates and startups alike are giving the pink slip to employees.
Massive layoffs, which began to grip the country’s embattled automobile and IT sectors last year, have now spread to more segments. While hospitality major OYO says it is weeding out obsolete roles, others like digital payments giant Paytm and IT major Cognizant are cutting costs.
Here’s a snapshot of the country’s aggravating jobs crisis:
- OYO: The Softbank-backed unicorn is trimming its workforce and has warned about more layoffs in future. OYO “will reorganise more teams across businesses and functions,” CNN reported quoting a letter by CEO Ritesh Agarwal to employees. “This means that, unfortunately, some roles at OYO will become redundant as we further drive tech-enabled synergy, enhanced efficiency and remove duplication of effort across businesses or geographies,” Agarwal added. The letter did not mention the number of jobs being axed, but media reports estimate it to be as high as 2,400.
- Walmart India: The retail giant has let go of 56 top executives at its Gurugram headquarters. “All the impacted associates (eight in the senior management and 48 in the middle/lower management) have been offered enhanced severance benefits and outplacement services to support their transition,” Krish Iyer, the company’s president & CEO said while confirming the development on Jan. 13. A report in the Economic Times had claimed that the company is letting go of a third of its top management as “profit has eluded Walmart in India with tepid sales growth, more than a decade after entering the country.”
- Samsung India: At the consumer electronics giant, top-level management is feeling the heat. The company’s chief marketing officer Ranjivjit Singh and enterprise business head Sukesh Jain have resigned owing to a “competitive work environment,” The Times of India reported. The newspaper claimed the company has let go of 150 people after merging some of its departments. Reacting to the development, Samsung India said that it “continuously realigns resources as per business priorities to make our business more robust and efficient for long-term success”.
- Cognizant: The US-based IT firm is looking to fire around 350 employees as part of a cost-cutting exercise and a shift in focus from traditional services to digital technology, according to a report in The Economic Times. Senior employees with annual packages between Rs80 lakh ($112,712) and Rs1.2 crore may be the ones affected, the report said. In November last year, Cognizant had said it would slash up to 7,000 jobs in the next few months as part of a cost reduction programme.
- Ola: Last month, the cab aggregator laid off 500 employees from its workforce to cut losses, as per a report published by news website Entrackr. The report further claimed the cab service provider will lay off more employees in the next six months. An Ola spokesperson confirmed the development clarifying that only 5-7% of its 4,500 employees would be impacted.
- Paytm: In a move to curb expenses, Paytm has reportedly asked 500 mid- and junior-level employees to leave, according to an Entrackr report in November. “We have a well-structured system to assist our colleagues in their journey with Paytm. Performance is also evaluated from time to time, based on which certain decisions may be taken,” a Paytm spokesperson told Entrackr.
- Quikr: The Bengaluru-based firm laid off around 2000 of its employees in December. Without confirming the number, the company told news agency IANS that it has decided to tweak its operating model, which resulted in some “workforce rationalisation” and “discontinuation of AtHomeDiva services”.
Tough times ahead
Official data released last year showed that unemployment in 2017-18 was at a 45-year high.
“We cannot say there is a crisis yet but the situation is surely worrisome,” says Sanjay Lakhotia, founder and CEO of human resource consultancy firm, Noble House. “When the economy is not doing well and the companies aren’t growing as expected, then the jobs at the senior- and middle-level are impacted. It’s a natural process.”
The situation may not improve in the current financial year either. “In FY19, India created 8.97 million new payrolls as per the Employees’ Provident Fund Organisation (EPFO) data. In FY20, as per current projections, this number could be at least 1.58 million lower,” according to SBI research report- Ecowrap published on Jan. 13.
The EPFO data primarily covers jobs that pay below Rs15,000 a month and does not include government, or state employees, who are covered under the National Pension Scheme (NPS). “Even in the NPS category, state and central government will create close to 39,000 jobs less in FY20 as per current trends,” the report added.