Corporate India bleeds jobs as slowdown bites all sectors

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Cuts in the automobile sector alone are estimated to be in the region of 1.2 lakh. (Thinkstock) Cuts in the automobile sector alone are estimated to be in the region of 1.2 lakh. (Thinkstock)
SummaryAn FE survey has thrown up a number of close to 2 lakh job losses in the last 8 to 10 months.

has not seen many layoffs so far.

The stress in the services sector is apparent from the number of brokers shutting shop in the wake of low retail participation in the capital markets. The number of brokers fell below the 10,000 mark for the first time in four years in May this year, according to data from the Securities and Exchange Board of India. The number of sub-brokers has also been steadily reducing and in FY14 so far, 4,200 sub-brokers have shut shop.

According to industry estimates, job losses in the stockbroking industry in FY13 have been anywhere between 9,000 and 12,000. About 75,000-85,000 people were employed in the industry at the end of FY12. "The last three years have been extremely tough for the broking industry. Except for select replacement hiring, there isn't much of hiring happening in the industry at present," said Alok Churiwala, vice-chairman, BSE Brokers' Forum.

The education sector remains broadly untouched so far, although some stressed companies like Educomp have been letting go of staff with nearly 3,500 employees losing their jobs at the company in the last three months.

However, hiring activity in oil and gas, telecom and pharmaceuticals has seen the biggest dips in the range of 13-14% in August, according to the Naukri Jobspeak index. Hitesh Oberoi, MD and CEO, Info Edge, which promotes Naukri.com, points out that hiring is bound to come under pressure in an unstable macroeconomic environment. “In such a situation, most companies focus only on replacement hiring and this cautious approach is reflecting in the demand for professionals across sectors,” Oberoi said.

Given how the global economy is still on the mend while disposable incomes at home are smaller and discretionary spends are coming off, the tourism industry too is facing headwinds. “Travel agencies have started consolidating their staff and employees now take on more work booking both domestic and international tickets. The staff strength across IATA-affiliated agencies has reduced by about 40% during the last 12 months and we expect about 25% of all travel agencies to close down, as they will not be able to manage their cash flow after January 1, 2014,” said Pradip Lulla, national general secretary, Travel Agents Federation of India. From January, payment circles to airlines stand revised from fortnightly to weekly, which could lead to a cutback in travel agencies.

Cut to the bone

* M&M is said to be running plants at an average capacity

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