How organisations are handling layoffs and salary cuts amidst the pandemic

The lockdown has seen uncertainty and anxiety as more businesses are mulling measures such as salary cuts, furloughs or even layoffs to tide over difficult times. Image credit: Image by Free-Photos from Pixabay Representational image.

The Supreme Court recently asked the Centre to respond to a petition challenging the layoffs and salary cuts which some media organisations have been implementing since the ongoing lockdown was imposed. With revenues from advertising dropping and companies reluctant to spend on marketing, media organisations have been badly hit by the pandemic and subsequent lockdown. While some organisations have closed entire editions and fired teams, others have sent their staff on furlough or have announced pay cuts for a couple of months. This is despite Prime Minister Narendra Modi requesting businesses to not fire employees during these difficult times.

Earlier this month, in a Facebook post, Times of India journalist Nona Walia said that she, along with the entire team of the Sunday magazine, had been sacked after serving the company for 24 years. News Nation has also sacked its English digital team, while Quint has reportedly asked nearly half of its news team to go on furlough or leave without pay. While they will be paid half of April’s salary, they will continue to be eligible for medical insurance.

According to Indian Journalism Review, NDTV has also announced 10-40 per cent salary cuts for employees earning more than Rs 50,000 per month, for a period of three months. The Hindustan Times and Indian Express have also announced varying salary cuts, while English evening paper, Star of Mysore has temporarily halted its print edition for the first time in 43 years.

It is not just media that has been affected. As per a survey conducted by FICCI and tax consultancy Dhruva Advisors, businesses are grappling with large scale uncertainty about their future. In such a scenario, many businesses may be left with little option but to resort to salary cuts or layoffs.        

According to a report by Mint, which quotes data from the National Sample Survey and Periodic Labour Force Survey, around 136 million non-agricultural jobs are at immediate risk, - these are primarily those in the informal sector, who work without a contract, and those working in small businesses, registered small companies and the self-employed.

Other sectors that have been struck by the pandemic include aviation, hospitality, retail, IT and the travel and tourism industry. The retail sector, which is the largest employer in the services industry employing over 37 million people, is likely to face job losses, especially in front end positions in malls and stores. According to the Centre of Indian Trade Unions (CITU), over 490 IT and ITES professionals across Bengaluru and West Bengal have lost their jobs. 

The aviation sector, which has been on a downward spiral with commercial operations halted, has seen GoAir, Vistara and Spicejet announcing unpaid leaves and job cuts. While Vistara announced Leave WIthout Pay for senior employees for up to three days, Go Air has furloughed as much as 90 per cent of its staff. SpiceJet has also decided to send employees earning more than Rs 50,000 per month on leave without pay on a rotational basis. This would be in place for three months.

India’s startup scene is no better. As per a report in the Economic Times, food delivery platform, Swiggy which has been hit badly by the lockdown, may fire employees next month. Swiggy could layoff people in its cloud kitchens, which Include Bowl Company and Homely, where around 500-900 people may be impacted.

As per Techcircle, social commerce platform Meesho has reportedly laid off over 200 of its 700-800 people workforce. This reportedly came a week after CEO Vidit Aatrey’s assurance to the employees that layoffs won’t happen. In a post on LinkedIn, former employee Avinash Kumar Mehta wrote about being forced by the management to submit resignation letters, despite being informed at a staff meeting that they did not have to worry about their jobs.

Grofers, the online grocery marketplace has also seen its business dipping amidst the lockdown. It has furloughed 70 employees for a period of three months from its ancillary businesses, which deal with non-essential items such as beauty business and offline sales, as per a report in Economic Times. While around 35 employees from the beauty segment have been absorbed into other functions within the company, the remaining employees have been placed on leave at reduced pay, until they are also absorbed into suitable positions. The furloughed employees will get 33 per cent of their pay and health insurance.

The Softbank Group-backed OYO Hotels and Homes, which has been badly hit with travel coming down to a complete halt, will be cutting the salaries of all India employees by 25 per cent. This step comes soon after the company furloughed thousands of its international employees.

Silver linings

However, during these testing times are also business leaders and companies that have tried to allay employee worries by assuring that there would not be any layoffs, or even going ahead with job offers. At a Townhall held early April, Flipkart group CEO Kalyan Krishnamurthy said that there would not be any layoffs or salary cuts. The company has further said that it would honour all job offers as well.

Despite its sales being hit, Coco Cola’s bottling unit in India has ensured that there are no layoffs or salary cuts. Instead, Hindustan Coca-Cola Beverages (HCCB), announced that the company would be offering all its 7,000 direct employees a 7-8 per cent salary hike, effective April 1, 2020.

While going ahead with its increments and promotions for all junior-level employees, French IT major Capgemini has announced that it will continue to hire as per requirements, honour all campus placements and will digitally onboard new employees.

US-based retail giant, Walmart, is planning to hire extensively in its Indian branches. While in Chennai, Walmart will hire around 800 people, it is expected to have 2,000 fresh hirings in its Bengaluru office, in 2020. IT major Infosys has also said that it honour all commitments made in terms of campus placements and lateral hiring. It has, however, suspended hiring, salary increments and promotions for a year, as per reports.

Further, IndiGo, which was among the first airlines to announce pay cuts of up to 25 per cent for April, has rolled it back in deference to Government’s request. However, the senior management has volunteered to take home reduced salaries for April, as per the company.

With schools shutting down and students relying on online teaching, edutech companies are amongst the few that have really gained in popularity and consumer base. Startups such as Unacademy, Byju’s and upGrad are hiring across various roles. With many states planning to extend the lockdown even after May 3, these companies will continue to have a field day.