Covid-19: Massive Layoffs and Pay Cuts in Country’s Formal Sector

Amid the lockdown, layoffs have been reported from various sectors ranging from media houses to IT industry. Though Prime Minister Modi had made repeated assurances and requests, more and more are on the verge of losing their jobs in the coming days.

In the last week of March, the Centre had appealed to all the public and private firms not to cut salaries of the employees or not to resort to layoffs. In a social commerce company Meesho, even as the employees were told that they needn’t be worried about their jobs, the company is now proceeding with dismissals.

“Suddenly, employees started getting calls and management forced us to submit our resignation on the same call yesterday. I just have one question to Meesho CEO: You don’t value your words, how will employees trust you?” Avinash Kumar Mehta said in a post on LinkedIn a few days back.

According to a report in The Economic Times, earlier this month, Meesho had fired close to 150 executives across departments citing “cost-cutting” measures that took everyone in the firm by surprise.

This is not just the case of Meesho. Many top companies including Oyo, BlackBuck, BharatPe, Acko, Fab Hotels, Zolo Stays, Treebo, Udaan, Homelane, etc. have fired employees and contract staff. Salaries of the employees have been cut in Bounce, Livspace, AgroStar, BookMyShow and Droom. The salary cuts range from 15% to as much as 50-70%. The layoffs and pay cuts have occurred, violating the direction given by the Central Ministry of Labour & Employment.

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The e-commerce platform Udaan alone sacked more than 600 employees working on contractual basis in Bangalore without any notice.

Extending support to the distressed employees, Karnataka State IT/ITeS Employees Union (KITU) said in statement: “Ministry of Labour & Employment, GOI has sent an advisory note on 20th March 2020, to all the employers directing them not to reduce salary or terminate employees including casual or contractual workers during the #Covid19 #lockdown. Acting against the GOI direction during this catastrophic situation is acting against the Nation's interest and hence KITU demands urgent intervention of the Government to this matter to protect the employees and request to take stricter actions against the management of Udaan who violate the advisory note and labour laws.”

As per a report in Money Control, over 1.5 lakh people across India’s various information technology firms are expected to lose their jobs in the coming months.

“The bigger firms may not be letting go of their permanent staff as of now, but after two or three months, they will feel the pressure and may not just keep on providing subsidies to the employees,” R Chandrashekhar, a former president of industry body Nasscom (National Association of Software and Service Companies), told PTI on April 12.

Apart from startups and the IT industry, the media industry has also seen instances of leaves or mandatory leave without pay. When The Indian Express, Hindustan Times and Business Standard have announced pay cuts, others are also reportedly taking steps to curb costs.

On April 10, 15 employees of News Nation, a Hindi news national channel, were asked to leave with immediate effect. “We have been asked to leave citing the slowdown from the coronavirus outbreak. There’s a team member who has become a parent of twins recently, his wife is still in the hospital, and at this time when the company was supposed to help, we have been asked not to come to the office,” a senior staff member from the sacked team of News Nation told Quartz.

Again on April 13, The Quint asked about 45 employees to go on indefinite leave without pay. The organisation faced “a truly unprecedented situation”. “…in these circumstances, it is clear that our revenues will be under severe strain over the next 3-4 months,” said an email sent by its HR department to the staff. The employees of Times Life, the Sunday supplement of the Times of India, have also been asked to leave on April 13.

The employees in the aviation sector have also witnessed such a crisis. On April 15, global airlines’ grouping International Air Transport Association stated that more than 20 lakh jobs are at risk in India’s aviation sector.

“Passenger revenue is expected to fall by more than $8.8 billion and passenger demand to decline by 36%,” Albert Tjoeng, assistant director for corporate communications at International Air Transport Association, said.

Some domestic airlines like SpiceJet and GoAir have resorted to leave without pay and layoffs of expat pilots.

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