In the last six months, Angels employee count has come down from about 6,200 to 4,200. Many sales and relationship managers have been handed out pink slips, said a person familiar with the development. Angels current employee count is similar to that of leading retail brokerage Sharekhan, which has about 4,000 employees.
A mid-level Angel employee admitted that the firm had been reducing its manpower for a while, but denied that the firm had resorted to mass firing. The layoffs are linked to performance; those who have not delivered have been asked to go. We are seeing some salary cuts as well. But its not like entire units or divisions are being done away with, he said, requesting anonymity as he is not authorised to speak on the issue.
According to him, Angel conducts six-monthly appraisals and the layoffs began soon after the December appraisals. The current situation, he believes, is symptomatic of the kind of irrationality displayed by broking firms during bull runs. There is a mad scramble for talent during a bull run and new hires are paid exorbitant sums. When things take a turn for the worse, there is no way to justify these salaries and broking firms are left with no choice but to let go of people, he said.
In an emailed response, Amit Majumdar, executive director and chief strategy officer of Angel Broking, denied that 2,000 people had been laid off: The number is not factually correct. We have seen some natural attrition taking place in the sales division, but that is generally the case in this business. Financial services industry has high attrition rates predominantly in sales but it is not to the extent mentioned.
Majumdar added that the firm continues to remain a net hirer even today. Our business model is flexible enough to run at an optimum cost and we continue to remain profitable in current market conditions. To be sure, an annual attrition of 25% is common in broking firms. Several people are laid off every year and several are hired. Its business as usual, said the retail head of a leading brokerage firm. However, according to the first person quoted above, Angel Broking may add just about 300-400 people in the coming quarter, much less than the number laid off. Yes, if Angel has laid off these many people and has not hired back an equal number, then its quite something, admitted the retail broking head. Broking firms, especially those focused on retail clients, are facing a tough time as delivery trades have plummeted and cash volumes on exchanges have touched historic lows. In 2008, its the clients who were crying even as brokers minted money as volumes remained more or less intact; now its the brokers who are crying as the volumes have dipped significantly, said the Angel employee. Angel Broking is predominantly a retail brokerage with over 7 lakh and a branch network of 175 branches including 20 regional hubs and 8,200-plus sub-brokers.