The keyword for India Inc in 2022 is ‘layoffs’. Apart from multiple startups, MNCs, such as Amazon, Meta and Google, too, joined the long list of companies which have resorted to mass layoffs.
Experts believe such moves are a result of several tech companies expanding rapidly during COVID. This, coupled with inflation and rising interest rates, has increased pressure on all tech companies. In light of the funding crunch and the fear of recession looming around, the hopes for laid-off employees are very bleak.
However, with preparations underway for the Union budget, staffing leaders expect the government to lay emphasison social security pay-outs, and incentive programmes like the Aatmanirbhar Bharat Rojgar Yojana and the scrapping of policies like Amazon’s Voluntary Separation Policy.
Revisiting severance pay conditions
Elon Musk’s tweet suggests that laid-off Twitter employees were offered a three-month severance package. Unacademy’s ex-employees will get a severance pay equivalent to their notice periods and an additional two months' salary, an accelerated one-year vesting period, medical insurance coverage for an additional one year, and dedicated placement and career support.
Nevertheless, Kartik Narayan, CEO, Staffing, of HR major TeamLease Services, highlights there are no social security pay-outs in India, like in the western world.
“It would be ideal if the budget creates provisions to revisit the terms of severance pay in India and mandates some degree of standardisation for them to provide for the disruption in the lives of these employees,” he adds.
ALSO READ | Life after a layoff: You’ve just been fired. Now what?
In light of the recent trends, including ‘The Great Resignation’ and ‘Quiet Quitting’, Narayan says the government should continue to focus on encouraging a vibrant business environment, especially for technology-based startups, with easy access to funding and incubation infrastructure.
Another focus of the government can be on creating an ecosystem to match the future job needs of the industry and work backwards with skill centres and educational institutes to train and create a future-proof workforce, says Santhosh Nair, COO & Director of CIEL HR, a staffing firm.
“National Skill Development Corporation (NSDC) initiatives, like NAPS (National Apprenticeship Promotion Scheme), can go a long way in creating jobs for youngsters and make them industry-ready, which will go a long way in creating a future-ready workforce,” he adds.
Besides, Nair expects the government to focus on incentivising companies for remote job creation and promote work from home (WFH) as a regular working model. “For this to succeed, rural and Tier2, 3 & 4 locations need to have deeper broadband penetration, infrastructure and communication development, among others.”
Scrapping of Voluntarily Separation Policy
Pune-based labour union Nascent Information Technology Employees Senate (NITES) received complaints from employees of Amazon that they are being “forced to quit the company voluntarily” and the e-commerce major has sent a detailed Voluntary Separation Program as well.
After NITES wrote to the Labour Ministry, seeking its intervention and immediate inquiry to safeguard the welfare, rights and families of Amazon employees, Deputy Chief Labour Commissioner (C), Bengaluru, sent a notice to Amazon.
ALSO READ | Silver lining amid startup lay-offs: Sectors hiring for recently axed roles
“We are hoping that the unethical Voluntarily Separation Policy introduced by Amazon will be scrapped by the government,” says Harpreet Singh Saluja, President of NITES.
Incentives for companies to hire laid-off employees
There is very minimal scope for any relief for laid-off workers, but the government made significant investments in IT, infrastructure, manufacturing, and digitisation in the last budget, which can lead to the creation of new job opportunities, industry experts say.
“Incentive programmes like the ABRY (Aatmanirbhar Bharat Rojgar Yojana) may offer some relief to those who have been laid off,” says Bhavna Udernani, MD & CEO at HR firm Adhaan Solutions.
“The previous budget also included a longer term for qualifying entrepreneurs for tax benefits, while SEZs saw the full digitisation of the customs administration,” Udernani says.
“While not directly assisting laid-off employees, all these variables will still do so indirectly,” he said.
With Christmas and New Year round the corner, experts hope that manpower demand, especially in the retail and sales industries, will go up.
ALSO READ | A healthtech company reveals salaries for every role in its careers page
“The government can come up with some offerings and schemes for the market during these months, and give some beneficial opportunities by which the laid-off employees are re-employed by other companies in other sectors where there is scope of employment,” says R P Yadav, CMD, Genius Consultants.
Changes in EPF withdrawal
During the pandemic, the government had given some slack to employees on PF withdrawals, without much or no documentation at all on the grounds of joblessness, illness or other issues.
As a result, many employees have withdrawn substantial amounts of PFs, says Yadav. “This, in the longer run, is not good for the country, as in India, we do not have defined pension structures in the private sector and post-retirement, that is, at the age of 60 or 65, accumulated PF is one of the largest help for most of the employees.”
Hence, he thinks it is expected that there will be a reform on PF withdrawals, with many restrictions and strict documentations in place.
As for firings, Yadav does not think the government will come up with any “restriction clauses” unless the situation worsens and layoffs increase in all sectors.
“As of now, we are in a situation where there is shortage of manpower in most industries,” he says.