At discount chain Subhiksha, employees are now at a discount! Strapped for cash after it hit troubles in its ambition to become a major national network of neighbourhood discount stores, the chain has not been able to pay salaries to the bulk of its more than 7,000 employees since October.
Employees say all they get are repeated assurances from the top management that their salaries will be paid
One employee, who joined last September but received the salary for only one month said: “If they didn’t have the money, why did they recruit more people?”
Employees, fearing for their salaries and careers, did not want to be identified. Subhiksha’s management did not respond to repeated attempts by Hindustan Times get its comments.
R Subramanian, the company’s founder and managing director, in an e-mail dated October 30, 2008 to Atul Joshi, a senior official with Subhiksha, had admitted that the management had failed in its task of planning for funds. “….there clearly have been issues of our planning and execution of the capital raising, etc,” Subramanian had said.
HT spoke to five of the employees of Subhiksha who are struggling to make ends meet. Some of those sharing rented accommodation with friends have gone back to their home towns. Some say they are lucky to have spouses who help them pay loan instalments.
Subhiksha has had to shut a large number of its over 1,000 stores in the last few months.
Last September, the chain was valued at Rs 2,300 crore with the founder of Wipro Ltd, Azim Premji buying a 10 per cent stake in the discount retailer for Rs 230 crore from ICICI Ventures, which still holds a 23 per cent stake.