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Covid-19 job impact: Which sectors lost the most people and which ones hired the most in 2020?

The year gone by saw millions of Indians laid off, both in the formal and informal sectors, with many still struggling to find a job. At the same time, companies in a few sectors went on a hiring spree. Just how much has employment landscape changed? Who gained and who lost? Read on to find out

January 12, 2021 / 01:46 PM IST

The Covid-19 outbreak in India and the subsequent nationwide lockdown from March 25 altered the landscape of the country’s employment sector. With close to 10.9 million jobs being lost across sectors, 2020 was termed the worst-ever year for the job market in India.

Among the various sectors, aviation, hospitality and travel were the worst hit due to the lockdown. Indians were forced to stay home and these sectors either sent their employees on ‘leave without pay’ or laid them off.

However, the healthcare (due to Covid-19 related growth) and education (e-learning) sectors saw a positive impact from the lockdown with close to 0.4 million new jobs being created in these segments according to industry estimates.

In total, HR consultants estimate that 1 million jobs were created in 2020, with the July-December period seeing the highest recruitment.

There is no centralised data available on the absolute number of jobs lost or employment created in India. However, various surveys by recruitment platforms and research agencies showed that the Unlock phase from June 2020 led to a partial recovery, though the job market stayed volatile throughout 2020.


What does the data say?

Data from the Centre for Monitoring Indian Economy (CMIE) showed that the unemployment rate rose sharply, to 9.1 per cent, in December 2020. This is the highest unemployment rate since the beginning of India’s recovery from the lockdown in June.

It is also a steep increase from the 6.5 per cent unemployment rate in November. CMIE said that the unemployment rate was seen rising steadily in the weekly estimates during December. This research said that the main reason for rising unemployment in December was the failure of the farm sector to absorb the influx of labour.

“Farming is the last resort of many who are rendered jobless. But December is not the month in which it can absorb labour. This is the month when it sheds jobs,” CMIE MD & CEO Mahesh Vyas said in the report.

Similarly, an outlook survey by jobs platform Naukri showed that the hospitality and travel sectors, which were already on a year-on-year (YoY) decline in recruitment terms from 2019 onwards, saw steeper dips in April 2020. This was on account of the lockdown and restrictions on movement.

Where the jobs were lost

Among the 10.9 million jobs that were lost, 5 million were in the travel and tourism sector alone.

The worst hit job role was of travel agents and tour guides. It is estimated that 20 million people work in the travel and tourism industry. The job roles involve sales, marketing, planning itineraries, customer service and on-ground tour guide services.

Mumbai-based recruitment consultant Vinita Oberoi told Moneycontrol that travel/tourism sector employees were among the worst hit because there was no safety net in companies, including outplacement facilities or three months’ pay.

“Small travel agencies started to shut down by May and employees were laid off en masse. Being a niche sector, it was also difficult for us for look for alternative options for these workers,” she added.

Apart from travel, the restaurant and hotel industry was also badly hit. Covid-19 fears and migration of workers led to eateries shutting down. Hotels were also forced to retrench staff in the wake of almost ‘zero bookings’ (except quarantine facilities) in April and May 2020.

Close to 3.5 million jobs are estimated to have been lost in these two segments. Hotels reported a 45.3 percent decline in their revenue-per-available room in the January to June period from a year ago, according to JLL’s Hotel Momentum India.

The Indian hospitality industry’s market size is estimated to be $10 billion and it is said to employ 35 million people.

An allied industry is the automobile/transport sector, which saw several drivers of private transport (buses, taxis) being laid off due to schools being shut and corporate employees working from home.

Close to 1 million such drivers/cleaners were out of jobs due to the extended shift to working from home. In fact, 150,000 school bus staff lost their jobs and haven’t yet received any financial relief as per the Bus & Car Operators Confederation of India (BOCI) & School Bus Owners Association.

Due to the lockdown, while online grocery shopping and e-learning picked up, offline retail suffered a blow due to malls being shut. This led to about 200,000 retail employees across departmental stores and high-street fashion brands losing their jobs between March and June 2020.

However, once India entered the Unlock phase, the retail sector started hiring again, albeit for temporary/gig roles. The net job loss currently is estimated to be 100,000 for this sector.

Gigs in demand

Gigs are short-term job roles that are offered based on seasonal demand. Industry sources say that close to 75,000 jobs are on offer on a temporary basis, led by sectors such as e-commerce, offline retail, IT/ITeS and the financial services sector.

Companies such as Ola, Uber, Swiggy, Zomato, Flipkart and Amazon are among the large players offering gig roles.

While gig jobs are contractually supposed to be short-term, several companies either extend the contract after every 3-6 months or absorb these workers in a permanent position.

Where were jobs created?

On the one hand, several thousand jobs were lost but newer roles started to emerge due to the ‘new-normal’ of remote working. Digital interactions became more frequent, as a result of which roles in areas such as cyber-security and data privacy, apart from IT backend support, were in demand.

Among sectors, the biggest gainer was the healthcare sector. Health and pharma were in demand due to the pandemic and these companies/institutions ramped up their staff strength.


Sameer Sarkar, CEO of Arise Career Services, which specialises in medical sector recruitment, told Moneycontrol that close to 270,000 jobs were created in the healthcare sector.

“Nurses were the most in demand followed by in-house doctors for corporates, ENT specialists, pharmacists and medical directors. At pharma companies, microbiologists and infectious disease experts were the most in demand,” added Sarkar.

report by Naukri said that that medical and healthcare saw an immediate sequential recovery of 90 percent in hiring in May 2020.

Medical/healthcare companies in search of professionals on include Fortis, Apollo Hospitals, Religare, Bayer Group, Mankind Pharma and Wockhardt Hospitals, among others.

E-learning boosts jobs 

Since schools and colleges were shut and online classes were being held, edtech companies gained the most during 2020. Industry sources said that close to 130,000 jobs were created in the education sector, led by online companies.

Here, companies such as upGrad saw a big spike in the number of employees amidst the online boom. upGrad was among the first to revoke salary cuts initiated earlier. Its employee strength also grew to 2,000 (in November) from 600 at the beginning of the financial year.

In fact, global edtech funding crossed the 2019 mark in September 2020 itself. Ed-tech startups have raised $4.89 billion across 377 rounds as of September 2020, according to a report by CB Insights, a market intelligence platform.

Here, India’s Byju’s was second (China’s Zuoyebang being first), having raised $1.5 billion from Tiger Global Management, DST Global and Silver Lake Partners, among others.

Is there a recovery in sight? 

In 2021, edtech startups, e-commerce platforms, electric mobility and healthcare firms are said to be leading the hiring list.

A December 2020 survey by ManpowerGroup said that nearly 65 percent of employers reported that they may return to pre-Covid hiring levels within the next nine months. The sectors expected to drive the job market in the first quarter of 2021 include finance, insurance and real estate, as well as the mining & construction sector.

For the travel/tourism and hospitality sectors, however, the worst is still not over.
M Saraswathy is a business journalist with 10 years of reporting experience. Based in Mumbai, she covers consumer durables, insurance, education and human resources beat for Moneycontrol.
first published: Jan 12, 2021 01:46 pm
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