Corporates to cut jobs by 25 percent: Assocham

October 29th, 2008 - 7:36 pm ICT by IANS  

New Delhi, Oct 29 (IANS) The corporate sector will lay off nearly 25 percent of its workforce in the next few days, predicted an industry body report released Wednesday, a day after Diwali. “Nearly 25 percent of the workforce will be laid off in seven key industrial segments, comprising steel, cement, IT enabled services and BPOs, financial and brokerage services, construction, real estate and aviation,” an analysis by the Associated Chambers of Commerce and Industry (Assocham) said.

“All these sectors have drawn up conclusive plans to curtail their workforce by 25-30 percent, announcements for which is likely in next 10 days or so,” Assocham president Sajjan Jindal said in the report titled, ‘Jobs Scenario Post-Diwali’.

Jindal said most corporates had begun planning lay-offs in a phased manner much before Diwali but deferred it to after Diwali “on human ground reasons”.

“Although curtailing workforce for any management is an extremely painful decision, employers have no other alternatives to cope with prevailing negativity for sustaining their operations,” he said.

“Some of the other measure to reduce costs were denial of bonus and ex-gratia, other incentives to reward performance and even gift distribution. Even this wasn’t found to be sufficient and that is why its next step is to cautiously reduce their employees,” the Assocham president said.

According to him, the third alternative is to curtail perks and perquisites of middle and senior management levels, with even many chief executive officers (CEOs) agreeing to accept “substantial slashing” in their packages.

The assessment suggested that negative sentiments in the seven sectors could be turned into opportunity if the the Reserve Bank of India discontinues with its tight monetary policy and decreases key interest rates.

According to the Assocham, inflation is no longer an issue. What is more important is creation of jobs, which will come with increased acceleration in manufacturing, it said.

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