This company is sending its 50,000 employees on a 10-day 'vacation'. Here's why

Kiran Gems is a key player in the global diamond market and an authorised buyer of rough diamonds from De Beers.

Kiran Gems, the world’s largest natural diamond manufacturer, announced a 10-day shutdown for its 50,000 employees, aiming to control production amid plummeting global demand and surging inventories. The vacation, scheduled from August 17-27, marks a significant response to the industry's current recession period.

"The diamond industry is going through a bad patch... a recession period... as there is no demand for polished diamonds globally," Kiran Gems chairman Vallabhbhai Lakhani told The Indian Express. "We have declared a 10-day holiday so that the production of diamonds can be controlled. Such a decision was taken for the first time in the company’s history."

The industry's struggles have been compounded by US-imposed sanctions and a G-7 ban on Russian-origin diamonds following the Russia-Ukraine war in 2022. These geopolitical factors have severely impacted diamond manufacturers, who are already grappling with decreasing prices and challenging market conditions.

"The price of polished diamonds has gone down globally and it has become difficult for diamond manufacturers to run their business. If the supply is controlled, the demand will grow and it will benefit the industry," Lakhani explained.

Kiran Gems, which boasts an annual turnover of Rs 17,000 crore, is a significant player in the global diamond market and an authorised buyer of rough diamonds from De Beers. The diamond giant employs over 50,000 diamond polishers, with 40,000 working on natural diamonds and 10,000 in the lab-grown diamond sector. Lakhani said that they are considering compensating workers for the vacation period.

“If other diamond companies collectively take a similar decision, the production can be controlled and it will help the industry," Lakhani said.

De Beers, one of the leading diamond companies globally, reported a 15 per cent reduction in rough diamond production in the second quarter ending June this year, citing "higher than normal" inventories as a critical issue.