Brace for 25 percent job cuts, warns leading Indian chamber (Lead)October 29th, 2008 - 8:21 pm ICT by IANS
New Delhi, Oct 29 (IANS) After denying bonuses and other perks to employees, India Inc is expected to hand out pink slips to nearly 25 percent of its workforce, a leading industry forum warned Wednesday amid growing concerns over the fallout of global financial crisis on corporate profitability.”Much more serious and alarming situation is emerging post-Diwali, under which corporate India is likely to announce lay-off of nearly 25 percent workforce in next 10 days in seven key industrial segments,” said the Associated Chambers of Commerce and Industry (Assocham).
In an analysis, the chamber listed the seven sectors as steel, cement, information technology-enabled services, financial and brokerage services, construction, real estate and aviation.
“As a matter of fact, most of the corporates had desired to start lay-offs in a phased manner much before Diwali of 2008. But these were advised to defer their restructuring after Diwali on humane ground reasons,” said chamber president Sajjan Jindal.
The measures, he said, included denial of bonus and other incentives to reward performance, even as gifts were curtailed.
“The assessment suggests that negative sentiments in the seven sectors could be turned into opportunity provided the Reserve Bank of India (RBI) discontinues its tight monetary policy and decreases the interest rates by at least three percent.”
The third alternative being devised by chief executives is to curtail perks at middle and senior management levels as slowdown will continue and businesses would have to stay on, the chamber said.
Placement agencies in the meanwhile have already deferred their plans and well known business houses in crisis-ridden sectors have stopped requisitioning human resource requirement in view of current meltdown, the chamber added.
“Job seekers are well aware of this factor which has created confidence crisis in most of them.”
Assocham said inflation was no longer an issue and what was more important in the present circumstance was to create jobs, which could come with increased acceleration in industrial production.
“Manufacturing will receive fillip provided input costs fall, credit is made available to all sectors of Indian Inc and existing bottlenecks on way of industry are removed in terms of prototype and old bureaucratic processes.”