Mumbai: Employees looking to further their career prospects are likely to find the road a tough one as the spectre of job losses may expand from automobiles to biscuits. This would limit job opportunities besides affecting the confidence of fresh candidates too, said hiring experts.
After automobile makers curtail production, biscuits major Parle Products has said it may have to lay off 8,000-10,000 employees following a decline in sales. Parle Products, which makes around 90,000 tonne of biscuits per month from 10 manufacturing units of its own and 125 third-party associates, has had to cut down its production by 7-8%, following a dip in sales in the quarter ended June.
Parle Products category head Mayank Shah said the price increase taken after an increase in GST did not go down well with consumers of low-priced biscuits (under Rs 100 per kg). The new GST regime clubbed biscuits in this segment (earlier exempt from excise duty) with those priced above Rs 100 per kg (the premium variety) at 18%.
“Consumers of this biscuit segment (under Rs 100 per kg) are extremely price-sensitive. It is this segment that witnessed a 7-8% decline in sales in the first quarter and pulled down our overall sales growth to 2.5% in April-June this year from 12% in the same period last year. When we cut production, it will have a commensurate impact on jobs as well,” said Shah.
CIEL HR Services CEO Aditya Narayan Mishra said such a scenario could create a sense of panic in the job market. “The people laid off would find it tough to find meaningful career opportunities immediately. They would have to look at alternative industry sectors. For freshers passing out in April-July 2020, new opportunities could be limited,” said Mishra.
Even while companies tread with caution, some recruitment firms believe this to be a temporary phase. Randstad India CFO Viswanath P S said, while some sectors like automobiles are battered, having a cascading effect on steel and aluminium, “we do not see a direct impact on hiring.” Viswanath believes people will start spending during the ensuing festive season, and this could lift sentiment. “By October end, we will have a clearer picture on the jobs scenario,” he added.
The first quarter of the fiscal year 2019-20 has been marked by weak