The dramatic flip-flop layoffs of Jet Airways employees last week was a chilling reminder to everyone that the party's over. But for many, the scorching global economic downturn started well before the present crisis and 'invisible' layoffs and retrenchments in several sectors were the order of the day.
Young middle-class professionals in the airlines sector, in banking and finance, in the Information Technology (IT) sector, the Business Processing Outsourcing (BPOs) sector or even in retail are definitely running scared. As financial consultant Sujata Kabraji puts it, "There is a general unspoken freeze on hiring, offer letters to business school graduates are gathering dust, promotions have been stayed and there have been cuts in perks and allowances. Sooner or later, everyone's going to be affected."
Consider a few facts: Quark City India, developer of an IT Special Economic Zone (SEZ) in Punjab, terminated 350 employees after its American investor was affected by the economic slowdown; Integreon Managed Solutions, which provides global support services to financial and legal companies, has announced plans to cut jobs. It employs over 2,000 people in India, the Philippines and the US. Yahoo has announced a 10 per cent job cut, affecting over 1,000 employees the world over, some of them in India. Meanwhile, TeamLease Services Employment Outlook Report for October-December 2008 has said that there will be a decline in employment at all levels.
Last week, barely two days after it had signed a deal on resource sharing with Kingfisher Airlines, Jet Airways announced the layoff of 850 cabin crew employees and threatened to retrench another 1,050 others. The subsequent outcry and the decision of the management to take back all the employees didn't win the management any friends, as cynics said that the debt-ridden company managed to buy more time from the central government to pay off its massive fuel bills.
The layoffs were by no means unique. Earlier, Kingfisher had already sacked 300 employees, after buying a stake in Deccan Air. After buying Air Sahara last year, Jet had offered a voluntary separation scheme that was taken up by 390 employees. Following the latest Jet layoffs, Kingfisher announced plans to sack 90 trainee pilots while Air India, the national carrier, decided to offer a three year leave without pay scheme for at least 15,000 employees.
But while the heat is on in the aviation industry, quiet and completely invisible job losses have thrown scores of people from the unorganized sector into the swirling waters of unemployment. Globalization has already claimed its victims in the agricultural sector, where casualization and feminization of the workforce was a given. Sujatha Gothoskar, India coordinator for the agriculture and plantation sector of the International Union of Food Workers, said that tea plantations, for instance, have not officially closed though workers have no work and no pay.
Around 54 per cent of the 800,000 workers of tea gardens are women, according to statistics of the Labour Bureau of the Government of India. "The door is opening to more insecure employment. The phenomenon of contractualization has been there for a long time and collective bargaining is eroded quite a bit with individual contracts. The employment pattern is changing for the worse," she said.
In Tirupur, Tamil Nadu, home of the apparel garment export industry, the future of more than 300,000 people - a majority of them women - is precarious, as no new orders have come in from the West. In the diamond polishing industry of the Santa Cruz Export Processing Zone (SEEPZ), the jobs of more than 50,000 people, again a majority of them women, is threatened by closures. While the general slowdown has affected everyone, the problem of employees in these special economic zones has always been governed by insecurity, said Mumbai-based labor lawyer Vinod Shetty.
"Typically, these companies take advantage of tax holidays they get every five years and close down one company and start another," he said, adding that events of the past week have only confirmed the myth of the market economy. "People look at the huge malls, the multiplexes, the departmental stores and the BPOs as evidence of a booming economy, but no one sees that shops in several malls have remained unopened, or open and shut after six months. Where do their employees go?"
Shetty, who is part of the India-FDI (Foreign Direct Investment) watch on the retail sector and floated the Young Professionals Collective as a forum for BPO employees, is upset at the manner in which India is portrayed as a country where labor laws are rigid. "But this is hogwash. The laws have been watered down, courts are pro-employers and, often, the interpretation of the law is totally anti-worker. Even if the worker's termination is proved to be illegal, s/he is not automatically reinstated with full back wages as the courts believe the worker must have been gainfully employed in the period of termination."
But the BPOs are seeing the effect of the global meltdown, as several extras like joining bonuses are not paid. Most BPOs maintain a bench of five to 25 per cent employees so as to start a project without delay and there will eventually be pressure on them, said a senior professional from the industry, speaking on condition of anonymity. "There are no layoffs in our group, but we are being prudent. While some companies are laying off, all others are being cautious. They are adopting a wait and watch policy. However, businesses which are in expansion mode are hiring, so things are not as grim," she felt.
While the layoffs were not gender-specific but just numbers, definitely those employed on a flexi/part-time basis would have to take a hit, she observed, adding that most people are scared.
But everyone's agreed that the youngsters will try to hold on to the job at hand. At least they won't move jobs or job hop, because they don't know what the next place will be like, feel Human Resource professionals. They need to stick to these jobs for at least two years, felt Darshana Soni, proprietor of a Mumbai-based middle-level placement firm, EET (Employers and Employees Trust) Services.
Striking an optimistic note, Soni felt that people are still hiring at middle-level jobs in the entertainment and media, oil and gas, glass and infrastructure sectors. "It'll take some time for things to settle down," she believed.
But senior professionals concur on one aspect - the psychological impact the downturn is having on the young employees of the service sector. "What's happening now, nobody knows how to deal with it. These younger kids have only seen a boom, so they are feeling threatened by loss of jobs, pay cuts, and none of the salary increases they once used to get. We've seen it all, so we are not so frightened; we know how to deal with the tough times."
The party's over but no one knows who'll be the first to leave and if there are any exits at all.