Layoffs are rampant in infra sectors with leading names like GVK, GMR, DLF Ltd reducing staff strength.
Sanchit (name changed) is a 32-year old mid-level manager with a leading MNC, who is working overtime these days as three of his team members were laid off last month as his firm has fewer projects on hand. Sanchit is not the only one. Companies across industry verticals are going through a hiring slowdown due to the general deceleration of the economy, which has led to weaker order books and consumer demand.
Be it layoffs, downsizing or slow replacement hiring, India Inc is reeling under economic pressures and not adding to the job pool.
Layoffs are rampant in infrastructure sectors with leading names like GVK, GMR and DLF reducing staff strength in the last one year. Education solutions firm Educomp was in the news recently for laying off 3,500 employees. Sources said Reliance Capital Asset Management last week handed over pink slips to around 200 of its employees across the country as part of a ‘cost-conscious drive’. The company has 900 employees. In an email to employees, Sundeep Sikka, CEO, Reliance CAM, said the company has taken the cost-conscious drive across the organisation to recognise inefficiency and eliminate non-performing costs and renegotiate contracts.
The $108-billion Indian IT-ITEs industry, which has seen a drop in business volume and growth rate, has so far not seen any kind of mass retrenchment by top-tier firms but has adopted other means to rationalise manpower.
The country’s fourth largest software exporter HCL Technologies did not honour the commitment it made to freshers and took more than a year to assign jobs to several graduates interviewed and offered employment in September 2011. Some freshers who were supposed to join the firm said they were asked to join for less pay than promised during campus recruitment.
“We have not seen companies laying off people as most of them have not hired significantly over the last year. At present, there is a freeze on hiring in certain companies including replacements and intake of freshers. IT services firms are mostly doing lateral movements within the organisation instead of hiring new people,” Sangeeta Lala, senior vice-president, TeamLease Services said.
In the last one year, volume hiring declined substantially among software services firms. “Companies earlier used to hire 25 candidates at one shot from campuses; now, it has dropped to 3-4 best candidates in the batch,” said a Bangalore-based HR consultant.
In the current fiscal, the IT industry is expected to see a decline in hiring by up to 17% adding 1,30,000-1,50,000 jobs, as some companies are still filling up the backlog from last year’s hiring — largely campus recruits.
During 2012-13, GVK reduced its workforce by 281 people while rival GMR cut around 200 jobs. Mumbai-based Reliance Infrastructure cut 112 jobs in the same period. However, the largest number of layoffs were by the Delhi-based construction major DLF, which slashed 1,100 jobs to end the fiscal at 2,600 people as compared to 3,700 in the previous fiscal.
As the rupee continues falling, experts say hiring will remain under stress in the coming months as well.
“While chemical and FMCG companies are hiring, the finance sector is facing challenges. Particularly, banks have problems of attrition and have unreasonable sales targets. On the other hand, entry-level hiring is happening in services like retail, entertainment and IT-ITES, but senior-level hiring is slow in these sectors,” added Lala.
Though no major retrenchment has taken place in telecom, financial services, asset management and private equity, companies are not going for replacement hiring in these sectors.
Said a senior official at a private life insurer: “Recruitment is largely happening in a selective fashion. There are cases of a recruitment freeze in the industry too, with no replacements when people leave. In certain geographies where the business has fallen, companies are reassessing the need for staff there and retrenchments may be happening.”
Said Suryanarayanan Subramanian, national head HR, Tata AIG General Insurance: “As far as the general insurance industry is concerned, growth is still happening in certain pockets. We have not seen any recruitment freeze. We are cautious about where we are hiring. The focus is on increasing productivity per employee. It would be better to take a call on compensation related issues by the end of the third quarter.”
Companies are letting people go easily and are creating an environment for resignations by not giving increments or additional responsibilities to employees. According to Uday Sodhi, CEO, HeadHonchos.com, “in manufacturing and engineering, planned hiring is not taking place as there is a slowdown in projects related to infrastructure”.
(With inputs from Rachit Vats, Vishwanath Nair & Coutinho in Mumbai and the Bangalore bureau)