Of Lay-offs and Retrenchment

Nityananda Ghosh

Post Covid industrial scenario as well as social and economic milieu of workers, both in organised and unorganised sectors are deplorable. Mass lay- offs have finished the hope of workers to dream for a better future. And digital labour is the worst affected. Globally Tech Companies have been downsizing their labour force through massive lay-off for quite some time. India is not immune to this lay-off phenomenon. Meta, Twitter, Microsoft, Alphabet---all the giants resorted to mass lay-off in 2022. In truth about 1,388 tech companies, both big and small, laid off a total of 233,483 employees mostly in 2022. As many as 1200 Twitter employees were forced to resign. Elon Musk, the new owner of Twitter symbolises the ‘hard core work culture’. His very name sends shivers down the spines of workers around the world. Mass retrenchment is the order of the day in industries.

One point that deserves serious attention is low wage for ordinary employees and astronomical pay-packets and extra-ordinary privileges for managerial staff in the digital world. In 2021 Amazon’s CEO earned almost 6,500 times the median salary of the company’s remaining employees. In the same year at Tech company Expedia the ratio was 2897:1, at McDonald’s 2251:1 and 1711:1 at Intel. As per AFL-CIO’s Executive Pay Watch Report annual average compensation for CEOs of top 500 US companies was $18.3 million in 2021 or 324 times the median worker’s pay. The ratio was higher than the figures of previous years–299:1 in 2020 and 264:1 in 2019. This is the hard reality of the much talked about digital economy.

Digital sector apart lay-offs and retrenchments are a regular industrial culture in formal and informal sectors as well. India, despite being a growing economy much behind the advanced capitalist economies, including China, is equally plagued by the lay-off and retrenchment syndrome.

The retrenchment in India’s Public Sector Units (PSUs) is rampant. Then they have stopped recruitment in permanent category completely. They are increasingly farming out core sector jobs while vacancies are mostly filled by contractual labour, having no access to minimum protection provided by labour laws which are being continually reformed to the disadvantage of workers. Besides PSUs the Union Government itself is a big employer of contract labourers. Even the Reserve Bank of India deploys contract labourers in perennial nature of job. The same is true of state governments. According to a recent survey of the 389 PSUs only 248 are said to be viable. But labour unions dispute this claim. They say the authorities are actually preparing ground to privatise these units at throwaway prices. In some enterprises where the government has more than 50 percent stake they have slashed workforce drastically. In 2012-13 there were 17.3 lakh employees in these units but the strength came down to 14.6 lakh in 2021-22. In the month of March, 2022 contractual and casual labour component in PSUs was 42.5 percent in compraison to 19 percent in March 2013.

Seven PSUs are said to have retrenched 20,000 employees in a very short period. Of these BSNL tops the list closely followed by SAIL and MTNL. They are downsizing workforce even in profit making units. SAIL and ONGC are making huge profits but they have stopped regular recruitment while increasingly switching over to contractual practice. Meanwhile, MTNL and Air India have been sold to private players. Rumor has it that BSNL otherwise a profitable organisation may be privatised anytime threatening its staggering army of even contract labourers. Barring Indian Oil most PSUs, numbering about 13, have reduced their workforce over the years.

Official propaganda that most PSUs are white elephants is baseless and motivated. Indian Oil is a jewel in the PSU Empire but the government doesn’t admit it in public. PSUs are a huge hunting ground of loot by the persons in authority.

Indian tech companies are equally ruthless like the global entities to follow the industrial culture of lay-offs and retrenchment. Forty-four Startups in India are said to have fired 16000 employees till October 2022.

Prominent Indian ED-Tech startups like BYJUS, LEAD, Vedantu, Unacademy, Trell and Lido Learning along with other companies like Ola, Zomato, Meesho, MPL, Innovator, Udaan and others have resorted to large-scale firing. All this was happening at a time when Prime Minister Modi was boasting of India’s progress in Startups. Incidentally he recently organised a job fair with a lot of fanfare to hide the precarious condition of employment situation. Unemployment is more like a volcano and no amount of Modi jugglery can suppress the reality. Even the defence department is depending on ad hoc-ism failing to fill up vacancies.

Bone-chilling reports are coming from Bengaluru–India’s Silicon Valley. Startup Front Row has laid off 75 percent of its staff. This Startup business model is based on Sanfrancisco-centred Startup Master Class where celebrities teach courses in their respective disciplines. It may sound funny but it is true! The courses offered by the Startups cover singing by Neha Kakkar, Comedy by Biswa Kalyan Rath, fast bowling by Bhubaneswar Kumar, batting by Suresh Raina and spin bowling by Yuzuvendra Chahal.

Synapsica, a healthcare Startup company has laid off 30 percent of its employees citing adverse market conditions. Insiders say this Startup Company is actually trimming its workforce with a view to increase workload. They are resetting their business. Zomato, a food delivery aggregator is said have curtailed 3 percent of its labour strength. Last year Ola sacked 500 employees. Vedantu handed out pink slips to 725 employees. Car 29 asked 500 employees to leave while Meesho and Trell fired 300 each. Mfine, an AI-powered telemedicine mobile App, has retrenched 500 regular staff. They are creating a huge army of newly unemployed.

All companies are vigorously trying to introduce Performance Improvement Programme (PIP) forcing workers to perform enhanced target. If the workers fail to achieve the target they are given marching order. What is more supervisors treat them as animals; they frequently use filthy words. Any protest may invite suspension or sacking. In absence of union they have no option but to accept humiliation quietly. They have no right to get unionised. Even managerial officers are not safe in this environment of high workload. One officer of Cadilla, a medicine manufacturing company, had to quit job because he failed to execute PIP properly. If the stocks remain unsold due to overproduction through PIP norm workers will have to face the wrath of the management. This is what one may call unregulated capitalism.

The plight of delivery boys and girls [popularly known as gig workers] engaged in service sector companies defies description. They have no fixed working hours. No matter whether it is rainy season or summer they are to run and deliver goods to customers. They are to deliver food items early in the morning or at odd hours in the night. Then they are not salaried people, they get paltry sum on commission basis. Amount of commission varies depending on distance. Gig workers earn Rs 12000 to 15000 a month. The company provides them a big shopper which they carry on their shoulder while riding on a two-wheeler, a bicycle or a motor bike. They are not covered by any kind of social security, not even by life insurance in case of an accident. State governments are indifferent to the oppressive working conditions under which thousands of Gig workers toil. Only very recently Karnataka Chief Minister Siddaramaih mentioned the issue of delivery employees in e-commerce companies while presenting the state budget on 7th July 2023. The chief minister and his finance minister announced that “in order to provide social security to the gig workers in the unorganised sector i.e. employed as full time or part time delivery personnel in e-commerce companies like Swiggy, Zomato, Amazon etc insurance facility of Rs 4 lakh will be provided…” The cost of the premium will be borne by the government. Incidentally before the Karnataka assembly election Congress ex-president Rahul Gandhi gave a patient hearing to the problems Gig workers face daily. Perhaps this is their follow-up action for the newly elected Congress government in Karnataka. Meanwhile, the Rajasthan Assembly has passed the Rajasthan Platform Based Gig Workers (Registration and Welfare Act), 2023. For one thing Rajasthan has become the first state in the country to pass a legislation ensuring social security of platform-based gig workers in the state. Incidentally no Bharatiya Janata Party ruled state has given any thought to the plight of gig workers who are multiplying in numbers every year in the fast-growing digital economy.

India’s rural economy is changing very fast. More and more landless labourers are seeking job in cities creating an explosive situation. Old feudal relations are breaking down but capitalism is yet to take firm roots in Indian agriculture. To arrest migration of large number of unemployed working age village population to cities the Centre introduced the Mahatma Gandhi National Rural Employment Guarantee Scheme [MGNREGS] to create Mandays to absorb rural labour in tertiary activities other than agrarian practice proper. The original idea was to provide work to village labourers for 100 days. In reality the authorities never succeeded in assuring work for 100 days. Despite many drawbacks it was a good scheme requiring more budgetary allocation. But the present BJP government is gradually curtailing allocation for MGNREGS. Rs 60,000 crore allocated [at 2011-12 prices it is just 33,375crore] in the budget for the next year (2023-24) is the lowest allocation since 2015-17. In other words, they are thinking to abolish this scheme altogether. But MGNREGS has created a new area of informal sector for the unskilled unemployed in rural India. Then non-BJP states are facing discrimination in allocation. As per allegation of state BJP which is in opposition in West Bengal, the Centre has stopped disbursement of funds making MGNNREGS workers jobless. They have not yet been paid their dues. For one thing the BJP was virtually wiped out in recently-held Panchayat polls in Bengal due to their deliberate holding of wages. It is not known whether the BJP has read the writing on the wall properly. If the centre continues to deprive the state of its legitimate dues they will have to reap bitter fruits in the coming parliamentary polls.

Back to Home Page

Frontier
Vol 56, No. 17-20, Oct 22 - Nov 18, 2023