Corporates are not contemplating major retrenchments in response to the subdued demand conditions in the economy, according to a survey conducted by PHD Chamber. According to the survey, a significant 60 % of respondents are not thinking of laying off their employees as part of their strategy to cut costs in this prevailing situation of economic slowdown. This is the finding of the survey undertaken by the PHD Chamber, covering over 200 respondents, on the impact of economic slowdown on job prospects in industry.

According to the survey, there is no doubt that leading firms are undertaking internal restructuring of their organisations to maintain their margins and mitigate the impact of the ongoing economic crisis. But the impact on job cuts is limited.  Firms are not looking at job cuts as a key strategy to cut costs and maintain their margins. However, this is not to suggest that lay offs are not happening. There is a sizeable number, around 30%, which are planning to cut jobs by up to 20% if the economic slowdown persists during the year.  It is only around 10% of the employers who are considering major job cuts in view of burgeoning inventories and sagging bottom lines.

To revive industry and prevent the lay offs from escalating further; the respondents are of the view that there is an impelling need to reinvigorate the economy by improving the investment climate.  In this context, the corporates feel that there is a need to augment public investment in infrastructure like roads, ports, air transport etc to revive the economy and ensure early completion of various components of the national highway development projects. More of such projects should be commissioned. “Investment in social infrastructure like education and health should be considerably increased and education system should be reformed to reduce the gap between demand and supply of trained and technical manpower.” said Mr.  Satish Bagrodia, President PHD Chamber. 

“There is a need to rekindle business sentiment by contemplating bold demand inducing measures. The government has, over the last six months, announced tax incentives packages- monetary and fiscal- including tax concessions and cut in key lending rates to tide over the slowdown in the economy.   But these proposals are not sufficient to stimulate demand.” added Mr. Bagrodia.

Anjula Singh Solanky
Dy. Secretary-Media Relations
PHD Chamber of Commerce and Industry