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Much of the layoffs will stem from distress sales and company closures, the people said. “We are going to see a continuous layoff for the next 12 months… Most companies have done one round of layoffs already,” said Anand Lunia, founding partner at India Quotient.
Layoffs may speed up year-end
Multiple internet businesses — including Oyo, BlackBuck, Treebo, Acko, Fab Hotels, Meesho, Shuttl, Capillary, Niki.ai, Swiggy and Fareportal — have on average cut workforce by 30%, including temporary staff, in the past one month.
Many others, such as Ola, Zomato, Zoomcar, MakeMyTrip, Chaipoint, Cashify, Livspace and Shopmatic, have reduced pay by as much as 50%, while a few have withdrawn job offers, according to data shared by Big.Jobs, a crowdsourced jobs portal.
The retrenchments will likely speed up year-end when many businesses initiate merger talks or fold up, said Rutvik Doshi, managing director of Inventus Capital India.
Initially, the Covid-19 outbreak hit early and growth-stage startups, data showed, but it is now impacting larger businesses as well.
“We’ve predicted that the next quarter will be a washout… but a month longer than that and the economics of the business change,” said the founder of a growth-stage consumer business. “I predict it could lead to at least a 20% further cut,” he said. Getting his business back to levels prior to the outbreak could take as long as two years, he added.
The worst-hit
Retail, hospitality, travel, mobility and financial services — worst affected by the pandemic — will see maximum job cuts. More than 600 businesses have downsized staff in the past one month, while a further 660 have cut salaries, according to Big.Jobs.
“Blue-collar jobs in the SME sector have been hit the most in the past two weeks; over 10 crore people have fallen into unemployment. For white-collar jobs, the crisis has only begun and is currently concentrated in a few sectors and VC-backed companies,” said Himanshu Geed, cofounder of the jobs portal.
In the next few months, large companies are expected to start restructuring and resort to trimming staff in a bid to go lean. This will be further propelled by a shift towards automation and artificial intelligence. “A few hundred thousand will likely be laid off in the white-collar segment in the next few quarters, mostly driven by large traditional companies,” Geed added.
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