Where Have All The Jobs Gone
Old jobs are being slashed and new ones have slowed down to a trickle. With corporate India shedding staff faster than ever before, the worst sufferers are freshers and middle-level managers.

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COVER STORY: JOB CRUNCH

Where Have All The Jobs Gone?

Devesh Ahuja had just returned from a shopping binge when his mother handed him a letter addressed to him. A 22-year-old graduate from one of India's top management institutes, Ahuja had been flooded with letters from his friends and relatives congratulating him on his first job with a US-based company, i2 Technologies, offering $70,000 (Rs 32.9 lakh) a year. Only this letter was different. Very different. It was a letter redirected from i2, cancelling the appointment. The company had frozen all recruitments. All that Ahuja had was one and a half month's salary, hardly any compensation for somebody who had rejected job offers from two management consultancy firms and one finance company in favour of i2. "I was sacked even before I was employed," says Ahuja.

Ahuja is lucky. He wasn't sacked after being employed. He could very well have been Kamaljit, 28, who was recently given the pink slip by his employer, the Delhi-based Trisoft Design. Or he could have been Jamshedpur-based mechanical engineer Pramod Mohan, who along with hundreds of his colleagues had to accept Tata Steel's Early Separation Scheme (ESS)-a variation of the Voluntary Retirement Scheme (VRS) after 17 years of service.

No matter which company, no matter what sector, no matter who owns it and no matter what level, corporate India is shedding its human resources at a speed never seen in the past. Through freezes on appointments, through outright sacking (mostly in IT companies), through benching (taking people off work without sacking) and through a more generous VRS, the bluest of blue-chip companies and the biggest of the public-sector corporations have been laying off staff. The evidence is all around to be seen. Ascent, the weekly jobs supplement of The Times of India, was 16-page thick less than a year ago. Now it has been trimmed to around eight pages. According to K. Lakshmikanth, CEO of the Bangalore-based head-hunting firm prizedjobs.com, appointment advertisements in newspapers have fallen by 60 per cent in the past two months.

The worst sufferers of the job squeeze are those at the doorstep of the job market. Even the best-of-breed institutes like the IIMs and IITs, whose students were lapped up by MNCs and top Indian companies in the past, are witnessing cancellations of job offers. Admits N.S. Rathi, placement officer with IIT Mumbai: "All these years we were flooded with job offers, but this year we have to run to companies to ensure all our students are placed. The students' morale is really down." The other IITs, IIMs and a host of management and engineering institutes are in the same boat. "The job market has never been so bad for freshers," confirms Preety Kumar, managing director of head-hunting firm Amrop International.

Middle managers are no better off. Not only are they closest to the firing line, those over 40 years of age are also finding themselves least wanted in the market. Explains Gopal Krishna, CEO of Hewitt Associates, an executive search company: "The maximum lay-offs are happening in the middle-management level. Organisations are built around layers. The core team, which does the strategising can't be done away with. The outermost layer that is out in the field dealing with customers can't be cut much. So if employee load has to be lessened, the middle rung is axed." Experience endorses the hypothesis. Confirms Lakshmikanth: "Till March this year we used to receive only a trickle of resumes from people with 3-15 years' experience. But now they are coming in hordes."

Though least threatened by retrenchment, senior managers and CEOs are not untouched by the season of sacking. To decide who and how to lay off is itself a challenge. In Bangalore, where technology companies are conducting large-scale lay-offs, HR managers and CEOs are taking lessons in how to sack. "If you don't downsize appropriately you capsize," says Niroop Mahanty, Tisco's vice-president, human resources. Mahanty should know. In the past 10 years Tisco has reduced its employee count from 79,000 to 48,000 without any major upheaval. The key: communicate honestly with those to be laid off and build the morale of those to be retained.

Elementary as they are, most private companies aren't following these ground rules. Kamaljit was fired on phone one fine evening some 15 minutes after he had left office for the day. He alleges that he was asked to collect his dues the following Saturday, when other staff of the office were told not to come. The CEO didn't see him. Innodata India, a Noida-based IT company, sacked 600 newly hired employees, allegedly without a day's notice (see box). While that reflects poor HRD, such sackings are the consequence of restrictive labour laws that do not allow for easy hiring of temporary workers.

Large-scale firing is new to India. Both employers and employees don't want to talk about it, however inevitable the retrenchment may be. The names of almost all the people quoted in this story as having been sacked or denied employment had to be changed to protect their identities. Many employers denied lay-offs, even though the employees they laid off had spoken to INDIA TODAY.

To be sure, some amount of sacking has always been on in the corporate world, especially in the 1990s. What has made it more painful now is that new job creation is sputtering to a halt. The two major drivers of new jobs are government investment in infrastructure and companies setting up new projects. Both investments are at a standstill. The Government is short of funds and private companies don't have enough demand for their products. Replacement jobs are hit by the relentless restructuring that is going on in the manufacturing industry. "Less than 2 per cent of the total new jobs created are manufacturing jobs," points out Krishna.

To compound the problem, the services sector, which had been compensating for the slowdown in manufacturing jobs, has not grown as fast this year as was expected. The bursting of the dotcom bubble apart, even services like finance and management consultancy are shedding jobs. Insurance, which was expected to boom in 2001, has been a slow starter. Says Dilip Chenoy, senior director, CII: "The despondency here is not because of 'no growth' but due to 'low growth'." There are also optimists like Sanjeev Sachar of executive search company Egon Zhender who are betting on the boom in telecom, biotech and entertainment industries. But given the severity of the current job drought, that is only a mirage of hope.

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