Coronavirus impact | Job losses may be seen in retail, hospitality, travel sectors

Over the past one week, a Delhi-based human resource consulting firm has already received seven requests, four from retail firms and three from travel companies. These companies have requested the hiring firm to inform new hires that their job offers are on hold till further notice.

“We are in a fix because these were fresh hires and they were to join in the first week of April. For retail specifically, this is their ‘end of season sale’ period and hence there was a higher requirement of staff at the shop-floor level. But with malls shut across the country due to novel coronavirus, or COVID-19, outbreak, job losses have begun,” said the executive director at a recruitment firm.

COVID-19, with 125 reported positive cases in India as of now, has led to Indian companies taking measures to cut staff at junior levels.

Though the numbers are still few, HR experts estimate that another 30 days of shutdown would lead to at least 3,000-5,000 jobs being lost. Large stores, restaurants and travel agencies would be the worst hit.

With multiple flights being cancelled/rescheduled, a few aviation jobs could also be lost. However, HR consultants said Indian carriers have not yet begun job cuts and only some salary rationalisation has happened.

Across companies, junior-most employees are being either made to take a ‘salary cut’ for the next few weeks when the establishments are shut or being let go.

In retail, the end of season sale is when there are maximum footfalls across malls and shopping chains. With a rapid increase in the number of positive cases, a shutdown is likely to continue for another 30-50 days. In this scenario, the additional ground staff and customer service personnel that were hired are redundant.

Though not all jobs will be lost, a few ‘feet on street’ would be asked to leave while the rest would take a pay cut.

In Mumbai, the Indian Hotel and Restaurant Association (AHAR) reported a 60 percent drop in customers in non-vegetarian eateries in Mumbai over the weekend. The same for vegetarian restaurants stood at 40 percent.

When it comes to individual sectors, travel/tourism is the worst hit due to governments across state ordering the closure of all organised tours till further notice. March to May is a period when travel companies earn 40-45 percent of their revenue due to families travelling during the summer vacations of school children.

The India chief executive of a global HR consulting firm said the country is in a unique situation given the economic slowdown is leading to job losses and COVID-19 is forcing companies to curtail business operations.

The official quoted above said travel and tourism companies are particularly impacted and are seeking advice for outplacement of their new hires. Outplacement refers to a service where a company takes the help of external consultants to find a job for their employee who they have to let go during a downsizing exercise.

Finding a new job will also not be easy with several companies adopting a ‘wait and watch’ strategy even for replacement hiring.

The head of placements at a Mumbai-based commerce college said companies are also delaying the offer letters and joining dates. This, he said, has caused uncertainty among graduates who were placed after several rounds of interviews.

Aditya Narayan Mishra of CIEL HR Services said the next four weeks will provide clarity on the employment scenario in the country.

“There will be an impact because when companies hire, they do so for the long term. Companies need to be sure if there is a career path for the hires. Even while hiring though there are technology-led tools available, not all companies are open to video interviews. This is also delaying the recruitment process,” he added.

With less than 15 days for the financial year (FY20) to end, companies have already begun to delay hiring plans and devising strategies to restructure the staff strength in the wake of COVID-19 and the continuing economic slowdown. For freshers, this is among the most challenging periods since their job roles would be the most at risk.