Companies On Laying Off Spree: Thousands Fired Due To Slow Growth
Job data for 121 companies – excluding IT and financial services sector – examined by The Indian Express, reveals that a majority of these organisations had an immense decline in employment numbers in 2016-17 over that in previous years.
All the 121 companies are a part of Bombay Stock Exchange (BSE) 500
The IT sector was excluded from the list because its employment is more dependent on growth and demand in US and European markets. As for banking and financial services, employment generation is more linked to penetration and reach of banking and financial services to individuals across the country. Experts say that banking and financial services are not a core sector of the economy.
Numbers available for the fiscal ended March 2017 indicates a decline of 11,318 (730,694 from 742,012) in net hiring across sectors such as metal, power, capital goods, construction and FMCG among others.
Though the change might seem small, experts say they point to a trend of concern – a net aggregate decline in employee strength of the largest companies in the country reflects upon the lack of expansion plan and near-term growth expectation of these companies.
“A number of companies in the manufacturing space are already saddled with high unutilised capacities and, therefore, instead of hiring they are taking measures to reduce their staff cost. Also, in many cases, if employees are leaving or retiring, the organisation is not getting replacements,” a top executive with a leading HR firm said, reported The Indian Express.
The companies that saw the maximum decline in employee strength
Of the 121 companies in the list, data for the last three years is available for 107 and this shows a net aggregate decline in headcount for the second consecutive year. Forty-nine of the 121 companies witnessed a net decline in their employee numbers at the end of the financial year 2016-17, 68 saw some addition to their net employee strength. Four companies witnessed no change in net numbers.
Several companies in metal, capital goods, retail, power and cement saw a net decline in their employee numbers.
The largest reduction in numbers – from 23,886 at the end of March 2016 to 16,334 at the end of the March 2017 – was seen by Firstsource Solutions, a BPO owned by the RP-Sanjiv Goenka Group. This was followed by Apollo Tyres and Heritage Foods, with the workforce numbers going down by 4,272 and 2,657 respectively.
Other notable declines are: BHEL (2,000) L&T (1,888), Hindustan Unilever (1,453), Idea Cellular (707), ACC (535), Tata Motors (534), Tata Steel (450), Hindalco (439) and Titan Industries (422) among others.
Last year, L&T, India’s 7th largest conglomerate reduced its employee strength by laying off 14,000 employees.
Companies that saw a net rise in their workforce
Several companies in sectors such as pharmaceutical and automobile, among others, saw a net addition to their employee numbers during the year.
The biggest addition has been in Abbott India (3,127), Sun Pharmaceuticals (2,769), Vedanta (2,489), Dr Reddy’s Lab (1,012), Alembic Pharmaceutical (818) and Piramal Enterprises (230) among others.
Five leading automobile players – Ashok Leyland, Maruti Suzuki India, Hero MotoCorp, Eicher Motors and Mahindra & Mahindra – added a net of 3,142 employees during the year, in line with the rise in sales of cars and other automobiles.
Employment numbers for IT and banking and financial services companies, which were excluded from the list, have been much better. The group of 52 companies in the IT and banking and financial services added over 1 lakh employees in FY’17 over the previous year. The biggest additions were done by: TCS (31,380), Wipro (14,111), ICICI Bank (8,745) and Axis Bank (6,842).
Read more at The Indian Express.