WHITE COLLAR JOBS

With businesses getting rapidly downsized, corporate jobs are on the chopping board.

By V Shankar Aiyar with Robin Abreu, Sindhu Jain and Shefali Rekhi

"When I resigned as GM of a nationalised bank, to join a merchant bank, a heap of congratulatory letters and fax messages gathered on my desk. That was early 1995. The stock markets collapsed soon after and very few people were turning up with requests for new issues. A year later, the group chairman called me over and said that however much he'd liked my work, he would now have my position axed. 'We shall make the severance painless.' Besides taking three months' pay, I kept the house for four months, and the car for three months. Now I am in a small house quite far out, driving my own rickety Fiat to hawk part-time, fee-based consultancy. Painless? My foot."

-- A former merchant bankerr

Jobs relocated. Work outsourced. People given golden handshakes, pushed down with a golden parachute, or plain axed. Body-slammed. Eliminated, like in a Stalinist Gulag. Dispatched never to reappear, as though they were some characters in an Agatha Christie novel.

Call it by any name, white-collar jobs in corporate India are surely in for a savage reduction in numbers and pay. As company after company reels under slow demand growth, or shuts down unprofitable businesses, well-heeled executives suddenly find themselves in the firing line, with no other employer around to roll out the red carpet for them. Those who manage to hang on somehow must slog ever more to earn the same wage. Examples:

Amit Roy, a 40-year-old chemical engineer, has recently obtained franchise for a fast-food chain in Delhi. His job till then, as a senior manager with Vam Organics, a plastics major in Uttar Pradesh, was quite stable. Or so he thought, until the company's range of adhesives, which he supervised, got too sticky on the shop shelves. He was forced to take early retirement and so were most of his colleagues in his section. With the entire plastics industry on a downswing since last year, he is now looking for opportunity as a foods store franchisee.

Till last year, Ajay Saxena headed a team of salespersons in north India which sold PCL personal computers to homes on monthly instalments. With the import cost of outdated 486 motherboards falling by the day, and the monthly repayment figures appearing to be affordable to middle-class households, the going was good. But the company's problems began after crossing a certain volume threshold of sale. The poor quality of after-sales service showed. The prices of the more powerful 586 computers fell steeply, intensifying competition. Finance was equally cheap. Saxena was among many other sales executives who were shown the door. He has now set up a shop that offers on-site annual maintenance contracts for home computers that have completed warranty periods.

S. Ramachandran, who headed the corporate communications department of a large paper-glass-chemicals conglomerate, had his first rash of goosepimples two years ago. That's when the personnel director of the group announced that he'd like to shed over a 1,000 managerial staff by closing down non-core businesses and retiring executives in inessential functions. Corporate communication was regarded as an inessential function as public-relations agencies were doing much the same job, at a lower cost than that of keeping managers on payroll. Smelling trouble, Ramachandran shifted to a tyre company. But this year his new employer arrived at pretty much the same conclusion about corporate communication. Ramachandran has now drifted to a steel company with the knowledge that, more than his place of work, it is the nature of his job that has got wobbly. "At 42, it is too late for me to learn new games," he says.

Ramachandran has kept his chin up and moved on. Most are not that brave or lucky. Over the past two years, hundreds of companies have embarked on acquiring a lean and profitable profile. Many are cutting down layers of management, with consequent redundancy of white-collar employees. Many more are caught in the jaws of a financial crunch. Result: thousands of executives have found themselves on the wrong side of the door. Industrial workers too are being pushed through the exits. While the blue-collar worker enjoys legal and union protection against summary retrenchment, executive jobs are a lot more vulnerable.

The corporate sector has begun taking a hard look at its executive payrolls," says S.L. Rao, former chief of the National Council for Applied Economic Research (NCAER), a Delhi-based think-tank. However, white- collar posts are being relinquished for a variety of reasons. Financial firms are trimming staff because of the depletion of public issues since last year. In the manufacturing sector, a number of firms had over-recruited in the past few years due to exaggerated future projections of growth; the sacked employees are now paying for their masters' mistakes. The wave of mergers and acquisitions has also taken its toll by shrinking executive posts. Rao says that, with the growth of computerisation, middle-level managers have started to vanish. "Like the priest, who comes between God and the devotee, the middle manager is wedged between the top management and the sales force. With computers processing market information, he is no longer needed." Nevertheless, the biggest blow to the boxwallah has been dealt by the ongoing economic slowdown, which has brought down the industrial growth rate from a vigorous 10-11 per cent till last year to a measly 4-5 per cent in the first half of this year. The profitability (percentage share of net profit in gross sales) of the private sector, as shown in a study by the Centre for Monitoring the Indian Economy (CMIE), had leapfrogged between 1993 and 1995, from 2.3 per cent to 5.3 per cent. Last year, however, it rolled back to 5.2 per cent. The top 50 Indian business houses could still manage to increase profitability, though at a much lower rate than before. But most other Indian firms experienced a steep decline -- from 5.2 per cent in 1995 to 4.8 per cent in 1996. The cmie study shows an even steeper fall in the operating ratios, which are the yardsticks for measuring efficiency of business. The deterioration in performance was conspicuous by all standards in Indian companies, particularly in the younger ones (with lower reserves), incorporated after 1986.

All job cuts -- executive and non-executive -- usually lag economic downswing by at least a quarter. The flab cutting is, therefore, in evidence now. At the Rs 1,186 crore Siemens India Ltd, 1,000 of the 8,200 workers have been laid off. The job losses follow the German mnc's unexpectedly poor performance in the past three years. It has posted a Rs 24 crore loss in the first half of 1996-97 and has been forced to retreat from a number of markets, including telephone switchboards and power-distribution equipment. While the Siemens case is an example of poor future projection tisco, the steel major of the Tata Group, is cutting jobs to increase productivity. Its workforce is down from 78,000 in 1992-93 to 68,760 today; over 15 per cent of its dismissed employees are executives.

As a CEO opinion poll conducted by global consultancy Price Waterhouse shows (see charts), unwanted executives are often turfed out by their management through a host of psychological pressure tactics. An Indian tobacco company, having decided to remove some of its senior managers, first changed their company cars to cheaper models and then removed, one by one, facilities not mentioned in appointment contracts. Personal assistants were removed, std facilities were withdrawn from telephones, and company-paid credit cards were taken back. As another survey on 'firing indicators' shows (see box), the executive is told in a variety of coded signals that he is no longer wanted. P.C. Chatterjee, vice-president (HRD) of DLF Industries, says the subterfuge often does not work on the "marginal employee" who has nowhere else to find a job. The sack is the last recourse because of the risk of it being legally disputed.

Despite the difficulties in shedding staff, companies are on a firing binge. White-goods major Whirlpool has fired 1,300 employees over the past two years while Philips India, the Dutch electronics giant, has reduced its workforce by 1,200. Petrochem firm NOCIL plans to shed 2,000 workers before the end of the century. Sterling Holiday Resorts has pruned its workforce by 30 per cent, closing down offices in small towns and merging various divisions. Foreign banks too have responded to a drop in disbursement of credits. ANZ Grindlays Bank has offered golden handshakes to 556 employees, over 10 per cent of the total number. At Standard Chartered Bank, 730 employees, a full fifth of the workforce, have opted out.

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