The Scare Spreads

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Is your job being affected by the global meltdown? Tell us your story at yourstory@bworldmail.com Losing The Thread : The textiles industry has reported a loss of 700,000 jobs (Pic by C.P. Shanmugham) India Inc. is not in a mood to hum to Prime Minister Manmohan Singh&rsquo;s tune. Recently, on at least two occasions, Singh has exhorted Indian companies to desist from steep job cuts. But such rhetoric is unlikely to cut ice with corporates at a time when staying afloat and keeping the balance sheets in good shape are proving to be Herculean tasks. According to a Ficci study, there was a whopping 99 per cent dip in profitability in the June quarter (year-on-year) in the textile sector alone. Textile investments in the April-July quarter this fiscal were one-third compared to last year. Chairman of the Confederation of Indian Textile Industry (Citi) R.K. Dalmia says many spinning mills have closed down in south India due to the worsening power situation and the overall slowdown. As per Citi&rsquo;s estimates, at least 700,000 direct jobs have been lost in the sector after the shutdown of 25-30 per cent of spindle units. Indirect job losses are in the region of 1.2 million-1.5 million. Garment exporters are in the same boat. &ldquo;Order bookings this year are down by 20-30 per cent,&rdquo; says A. Shaktivel, president of Tirupur Exporters&rsquo; Association. &ldquo;Nearly 20,000 people are expected to lose (their) jobs by January-February.&rdquo; In the IT sector too, an estimated 70,000 were handed pink slips this year. Many companies across industries continue to lay off hundreds. GlobalLogic, a software product development company, has sacked 125 employees. Fidelity National Information Services has shown the door to over 100 people in its Chennai branch. L&amp;T is cutting 5 per cent of its workforce of 10,000. Tata Steel has cut 400 jobs at its Corus unit in the UK. &ldquo;Job losses now may also mean that there was surplus capacity in the market till some time back and that companies are reducing fat to stay lean and fit,&rdquo; says Kulin Patel, head of employee benefits practices at global HR consulting firm Watson &amp; Wyatt. But, says Patel, key talent is always going to be retained. Getting lean (and mean) may be a good strategy for corporates in the long run, but the rising unemployment could play havoc with the economy unless the government throws a lifeline the way countries such as the US, China and Germany have. But it will be some time before the government takes action on the ground, going by what the director general of employment and training and joint secretary in ministry of labour and employment, Sharda Prasad, has to say: &ldquo;The Prime Minister had recently set up a committee to look into the different aspects of the downturn. To tackle the specific issue of job losses, the ministry of labour will be setting up a group shortly to study the impact on different sectors.&rdquo; Based on this, a background paper will be prepared and in December a conclave including experts from the International Labour Organization and the World Bank will discuss strategies. Trade unions are obviously not willing to wait that long. After the government&rsquo;s refusal to meet its representatives on downsizing, the Confederation of Indian Trade Unions (Citu) has decided to observe a protest day on 21 November. According to Citu President M.K. Pandhe, eight central affiliations and industry bodies have agreed to take part in the agitation. A meeting will be held in December to chalk out the future course of action. Trade unions have also decided to scrap the meeting of the Indian Labour Conference this year &ldquo;as a mark of protest against the Prime Minister&rsquo;s reluctance to meet the unions&rdquo;. That is a lot of talk &mdash; protests, committees, and high-level discussions. But when the government and other players will walk the talk is the big question. shalini(dot)sharma(at)abp(dot)in (Businessworld Issue 18-24 Nov 2008) &nbsp;