Indian firms are likely to lay off a quarter of their employees in the next 10 days, as part of steps to contain costs in the face of shrinking margins amidst the economic turmoil, an industry body said on Wednesday. Trade body Associated Chambers of Commerce and Industry of India (ASSOCHAM) said the job cuts would be across the steel, cement, construction, real estate, aviation, IT-enabled services and financial services sectors.
Expansion has slowed in Asia’s third-largest economy in the last two quarters, from the 8 per cent or more annual growth in the past four years, with high interest rates crimping demand and on the global financial crisis.
The central bank last week cut its forecast for growth in 2008/09 to 7.5-8 per cent from its earlier view of 8 per cent. This compares with the economy’s 9 per cent growth in 2007/08.
“Employers have no other alternatives as part of their corporate strategy … for sustaining their operations with squeezed margins (even) after after drastic cost cutting measures,” ASSOCHAM said in a statement.
Last week, realty firm Parsvnath Ltd said it would axe “non-performing” employees, as it was facing slowing sales.
Top private carrier Jet Airways had sacked 1,900 employees mid-October, citing declining demand and high fuel costs, but reinstated them days later on protests and political pressure.
Source : Business Standard