Retail industry feels layoff heat
As India feels the ripple of a global financial meltdown, sectors, such as retail, which were so far not only fast-growth ones but also hot employers, have developed cold feet. If they aren’t laying-off people, they have almost frozen new recruitments.business Updated: Oct 16, 2008 23:40 IST
Shekhar Mehra, a 39-year-old deputy manager with Vishal Retail was shocked when his company asked him to resign with immediate effect.
“About 400 people have been asked to resign. When I asked my HR head to assign even one genuine reason for this (the request for a resignation), he was speechless,” said Sharma, who looked into procurement and merchandising of food products for Vishal and earned an annual package of Rs 4 lakh.
However, Manmohan Agarwal, CEO, corporate affairs, Vishal Retail told Hindustan Times that the company has not done anything radically different than what was the practice for years together. “For six months, we have people on probation. Also, for some management cadres, we don’t have any provision of notice period. We adhere to all terms and conditions of the contract we enter into with all our people,” he said. The company has 14,000 employees and Agarwal said that 300 to 400 people leaving every month is a common thing.
As India feels the ripple of a global financial meltdown, sectors, such as retail, which were so far not only fast-growth ones but also hot employers, have developed cold feet. If they aren’t laying-off people, they have almost frozen new recruitments.
“Talent will always remain a function of growth and with companies getting a little cautious now, layoffs are imminent especially in sectors who, in the wake of significant and fast growth of the last few years had gone overboard on hiring,” said Raj Bowen, managing director (India), Personnel Decision International, an HR consultancy firm.
“Six to seven months back many retailers were bullish on the entry of foreign players, which have now been deferred due to the slowdown. This coupled with protests from smaller retailers as well as political protests have hit them big. Many retailers have also seen their stock falling and this has led them to take certain tough measures,” said E. Balaji, CEO at human resource consulting firm Ma Foi.
Though there is no official confirmation, some media reports say Reliance Retail has laid off more than 2,000 people. “We would categorically deny reports of retrenchment of staff undertaken by Reliance Retail,” said a Reliance spokesperson.
Sanjay Jog, chief people officer, Future Group said his company is continuing business as usual. “We recruit about 500-600 people every month and currently, there is no change. In case there is a delay in completion of properties due to the US slump, it may affect the industry.” The company has 30,000 employees.