Making HR Human Removers

The Global Slowdown - India Inc's Response and Its Cost to the Indian Worker

As the news of global slowdown perched on the Indian Economy, India Inc was quick to react to ensure that they were well insulated against "all the evils" of recession. And how did they go about doing it?

1. By Chopping their Workforce indiscriminately and making Performance the trump card for retention and separation.
2. By Freezing all Hiring activities - for all positions irrespective of importance.
3. By Shelving most of their investments and postponing all planned capital expenditures.
4. Delaying or moving out of moderate and high risk projects.
5. Renewing their focus on Productivity across the organization.

A careful look into the above measures show that most of these had a negative connotation, except of course the last one!. Years of rapid growth in some of the Industry Sectors had made us believe that we were on a long and swift journey towards economic progress - a journey that no force could stop or hinder. The Indian Economy exhibited such Confidence ( or arrogance if we look at it now) that no one had seen before. The world began to stand up and take notice. Welcome to the New and Strong India.

But Alas! As it always happens in romantic love stories, there arrived a villain - a brute force which was determined to play spoilsport with the emerging romance. Recession. Taken aback by the sudden onslaught of a never before seen force, India Inc. decided to act. And these acts were not anything unique or innovative - nor were they suitable to the Indian scenario. Most of the actions that followed were a typical copy of what their American Counterparts were doing. So, Whats the call for HR here? and Where did India Inc and the Government miss out?

Unlike in the US, where social security is provided to most workers, here in India such a social cover is virtually absent or totally inadequate. So that meant that when thousands of workers/ employees were asked to leave overnight, the burden of providing such security fell on the government's shoulders. I suspect if at all any of the Indian employers ever looked at alternative ways to cut labor costs?

Improving Productivity became the watchword for many companies, with several of them taking bold steps to enhance their output at all levels. But this effort seemed to be too little and too late for them to face the global crisis. This lack of focus on Productivity by India Inc during the good times should be attributed as one of the primary reasons why such massive layoffs were needed.


I was going through an interesting article which professed on why American Companies embrace Layoffs as the Best way of cutting labour costs. Click the link below to access this article.


Why is it that in a recessionary economy, employers primarily use layoffs to cut labor costs? Why don’t they look for alternatives?

Other related articles

• More than 5 Lakh Jobs would have been lost due to the slowdown - Business Standard

• Indian HR good at Cuddling and Poor in Chopping…- By Dr. PVRMurthy on the NHRD Blog