Job cuts have been one of the many negative fallouts of the coronavirus pandemic. Recently, Accenture, which has around 5,00,000 employees, decided to lay off 5% of its low performing workforce.
Accenture’s Lay Off
The Accenture job cuts will affect Indians prominently as Indians make up almost 2,00,000 of Accenture’s workforce. CEO Julie Sweet conveys that this is not an extraordinary global workforce action. Instead, this is just a routine check of the performance process to see if they are a good fit for the company. Further, she mentions that new people are hired in their place. However, the case may not be the same this time because of sluggish demand during COVID-19 hardship. Moreover, Accenture is not the only company involved in downsizing their workforce as many other big companies followed suit.
Second Wave of Job Cuts as Future Does not Look Bright
The coronavirus cases are surging in India with over 70,000 COVID-19 incidences each passing day. The surging pandemic dreadfully affects several businesses. And thus, they are looking at job cuts to sustain themselves. For instance, Swiggy laid off almost 1,100 people in May. Following that, they laid off another 350 employees and called that a “final realignment exercise”. A spokesperson from Swiggy mentions that the industry has gained back only 50% of its peak. Therefore, the layoffs are inevitable during these challenging times for the company’s survival.
Similarly, a health and fitness startup- Curefit also laid-off workers for the second time after initially laying off 800 workers in May. Gyms and fitness centres are still closed due to stringent lockdown measures. Thus, forcing the owners to take the drastic step of job cuts.
In an interview with Vishal Chhabria, MD and CEO of Crisil, Ashu Sayash says that the economic activities will remain curbed for a while before seeing mild recovery. This does not augur well for the workforce in the country, as many of them might lose jobs and receive pay cuts.
More than 10 Million Jobs Lost Due to the Pandemic
Over 10.8 million people lost their jobs due to the pandemic, according to Money Control data. Out of which, the travel and tourism industry is the worst hit with 5.5 million job cuts. Also, the pandemic’s air travel restriction impacted the aviation industry. Owing to that, Indigo said that it might lay off 10% of its workforce in May. Following that, the hospitality sector also lost 3.8 million jobs until August. Besides that, many other industries, like IT, Retail and BFSI, have seen job cuts. Note that, these numbers are the highest since India liberalized in 1991.
Major Layoffs by Other Companies in India
Many other companies in India also undertook major lay off decisions. For example, the leather industry in Vellore has not been receiving orders because of the pandemic. Therefore, it is laying off almost 75,000 workers out of their 1.5 lakh workforce. The workers in these plants are majorly women from the districts of Vellore, Thirupathur and Ranipet. Pradeep Krishnan, project coordinator of CIVIDEP, an NGO said that the pandemic affected workers severely due to disruption in the international supply chain. Further, he mentions that many workers do not have other means of employment, as many of them are from socially backward sections.
Further, the pandemic also greatly affected the auto industry. Accordingly, Yamaha India Motor Group saw a decline of 84.78% in the April-June period. Therefore, they are looking to lay off 200 workers in various divisions in the company.
In a controversial move, Air India extended its “Leave Without Pay” (LWP) scheme. And, it drew protests from both the pilots and the cabin crew. The staff look at this step as a means by which the company can get off without paying compensation to workers. Typically a settlement includes arrears, gratuity, PF and payment by law. By introducing the leave without pay for up to 5 years, the management is trying to dodge settlement. Further, Air India laid off 48 pilots after promising not to do so.
Layoffs have become common in companies all over the country. They have caused considerable distress among employees because they cannot search for alternate means of employment in this period.
Layoffs Show Lack of Empathy: Ratan Tata
Ratan Tata condemned the layoffs made by companies due to the COVID-19 pandemic. He criticised the lack of empathy and said that business is not only about making money. Further, he mentions that a company must act ethically towards its customers and stakeholders. In an interview with YourStory, he questioned whether it was ethical to lay off workers who have worked for you all these years.
At times like these, a lot of businesses are looking to keep themselves afloat. But, they also must treat their workers with respect and dignity.