As the novel coronavirus continues to wreak havoc across the country and the nationwide lockdown results in significant dip in revenues of many leading companies, these firms have started to let go of employees, resulting in the exacerbation of the unemployment problem in the country.
Cab aggregator Ola is one such company which has been badly hit by the lockdown. Ola CEO Bhavish Aggarwal told PIT that the layoffs were triggered by a significant dip in the company’s revenues. A number of other companies, including food delivery services Swiggy and Zomato, and some media firms have fired employees over the past two months, despite a government appeal not to do so.
Hindustan Times laid off around 130 employees. Insiders suggest that firings have been across the board, including sales, marketing, and editorial. They also mentioned that the Patna and Pune editions were closing down.
Media organizations such as The Times of India, News Nation and The Quint have laid off employees despite of Prime Minister Narendra Modi asking public and private employers not to do so or cut their salaries. Sources have also said that ET Panache and Bombay Times are all set to merge and that ET Panache has asked its 50 per cent staff to go on leave.
The tech giant IBM has also started firing employees in the midst of the coronavirus pandemic. The tech industry has suffered widespread job losses after the pandemic triggered a severe slowdown. Hewlett Packard Enterprise, the storage and server firm, said that it would save $1 billion by reducing pay and other costs. Airbnb Inc and Uber Technologies Inc have also cut about a quarter of their global workforces.
“IBM’s work in a highly competitive marketplace requires flexibility to constantly add high-value skills to our workforce. While we always consider the current environment, IBM’s workforce decisions are in the interest of the long-term health of our business,” Ed Barbini, IBM’s spokesperson said in a statement. On online forums, dozens of newly unemployed IBM workers, some who said they had been with the company for more than 20 years, lamented the situation and expressed anxiety over finding a new job in a recession.
The Supreme Court had on 27 April expressed concern at the layoffs and salary cuts by some media organizations. The court issued a notice to the Centre on a petition filed by the National Alliance of Journalists, the Delhi Union of Journalists and the Brihanmumbai Union of Journalists, opposing the layoffs and pay cuts.
India’s unemployment rate was a tad higher at 24.3 per cent for the week ended May 24 compared to 24 per cent in the preceding week or the average unemployment rate of 24.2 per cent in the past eight weeks of the lockdown. The unemployment rate stood at 8.8 per cent in March.
However, the labor participation rate fell marginally to 38.7 per cent in the week ended May 24 as against 38.8 per cent recorded in the preceding week after increasing for three consecutive weeks, says the Centre for Monitoring Indian Economy (CMIE) in its weekly report.
The month of June is likely to generate more jobs because in the last week of May, the unemployment rate fell to 20.2 per cent—the lowest unemployment rate recorded since the imposition of the lockdown. However, most of the initial improvements will be of poor quality jobs.
“Salaried jobs are relatively difficult to get. And, salaried jobs lost during a lockdown are far more difficult to recover. These are also the better jobs. The continued loss of good quality jobs is therefore worrisome,” noted CMIE.