Although various segments of the industry, including IT, aviation, textile and financial services, are witnessing a trimming of their workforce to rein in costs, the Indian steel sector, which employs tens of thousands of people, is still in a wait and watch mode.
Although there are no job cuts so far in the sector, steel manufacturers like JSW Steel and Ispat Industries have frozen new recruitments for the time being.
Says Anirudh Singh, senior VP- corporate HR, JSW Steel Ltd, ?We are not hiring people for the time being. We have hired a good number last month, but due to the slowdown, we have frozen new recruitments temporarily.?
Another spokesperson from JSW Steel said that the company has discontinued the services of its contractual employees (which are about 1,500) as it has postponed the launch of its 3 million tonne blast furnace. However, no pink slips have been given to any employees who are on the company?s pay rolls. According to industry players, currently companies are curtailing contractual or temporary employees, but if the situation continues, it will be difficult to sustain the operations with the existing manpower strength.
?So far, we have not cut any jobs but we are not hiring people as well. We are watching the situation closely and if this slowdown continues, then we will decide accordingly,? said Anil Surekha, executive director-finance, Ispat Industries Ltd.
On the other hand, Essar Steel Ltd has no plans to cut down on head counts or salary package of employees as its salary to turnover ratio is minimal. Last year, employee costs stood at 2% of the company?s revenues, an Essar Steel spokesperson said.
An e-mail query sent to Tata Steel Ltd did not elicit any response. But the steel maker?s international subsidiary Corus, which accounts for about 75% of Tata Steel?s total revenues, last week slashed about 400 jobs in the UK and Ireland, citing poor business conditions as a result of the slowdown in the steel industry. However, Tata Steel signed a wage revision agreement with the Tata workers’ union last week, where the company doubled the minimum wage payable to its employees at Jamshedpur.
Says Pawan Burde, an analyst with Angel Broking, ?There may be a recruitment freeze, but job cuts look unlikely in the steel sector as the overall employee cost is just 7-10% of the revenues in the steel segment. Curtailing temporary or contractual staff differs from company to company.?
