Forward by Venkat
Managements- Get your act together before layoffs Else Repent in leisure
I thought I will write an article on this issue of layoffs and how Managements could handle it better. After all so many lives could be dependent on one breadwinner of the family, that may be your close friend or your own colleague or your relative. Without doubt, Layoffs cant be avoided because of the disturbing recessionary trends Globally. But what could be avoided is the intense heartburn between the Employer and the laid off employee. What is been happening in the past few months when it comes to layoffs is not right and unethical. and it is in this direction I thought I will contribute something positive in these negative times.
I just read about one IT Firm offering Severance package of Two months salary to the laid off employee..I think it is ridiculous. mostly it is the basic component of the salary they are talking about..and not take-home salary..that would work out to just 50% and altogether Severance package will work out to be only One month takehome salary. Can draw laidoff people mad with their family’s financial commitments..
Ofcourse, Indian IT companies when they got Good Annual profits (as they did in the past 5-10 years) did not share as much as the Employee deserved. But atleast when they are not doing well, they can share those money sacks lying in their Bank coffers. atleast by giving decent severance packages..
To say the least, Severence packages are measly in our country. I am not talking abt any one IT Company in particular, but most Indian IT Firms. Managements have to work on how they can give the best package rather than citing the old employee contracts, Indian market facts, Global recession,performance appraisals and such lame excuses. If you can give decent offers monetarily while these employees where being recruited in truckloads, follow the very same policy during exit too. Give employees what they deserve. Where are the voices from NASSCOMS and CIIs. Are they only for protecting Employer interests ??
Before politicians come knocking on the IT CEO’s doors just like they did as in Jet issue, it is better they understand the situation and give the laidoff employees decent bye-bye packages. Else there are umpteen unions and Violence-happy outfits who are ready to exploit the volatile situation. As a sane person, I dont think we should give such nasty-minded outfits a chance to do that..All is well when it is well..and yes this holds viceversa too. Play your cards right.
Managements, Get your act together before it is too late. Be Professional. Let it be a win-win situation to both managements as well as the pink-slipped employees.
Tuesday, November 4, 2008
Layoffs in India
American Express India cuts Jobs!
Credit card company American Express has asked some of its senior managerial employees to quit as part of its strategy to save costs.
The layoffs are primarily in Delhi and Bangalore and all the employees who have been asked to quit have been with Amex India for the past 15 to 20 years. Amex India has hired a consultancy to help sacked employees find a new job. The company currently has around 6,000 employees in India.
PTI reports the company is believed to have handed over pink slips to about 200 employees and senior executives.
The report on layoffs comes on a day when Prime Minister Manmohan Singh asked Indian companies to “refrain from large-scale lay-offs”. Singh on Monday warned industry leaders that layoffs may lead to a “negative spiral”.
“While every effort needs to be made to cut cost and raise productivity, I hope there will be no knee-jerk reaction such as large-scale layoffs, which may lead to a negative spiral,” Singh said on Monday.
American Express confirmed that it would cut jobs in India but said it cannot give a specific number. “Approximately 7,000 jobs are being eliminated company-wide which translates into about 10 percent of the company’s worldwide workforce,” the company said in a press statement.
“While we cannot give you specific numbers for India, we can tell you that we (Indian operation) are not the main focus for restructuring,” it said. “Reduction will occur throughout the company and across business units, markets and staff groups, primarily focusing on management and other positions that do not interact directly with customers.”
American Express, last week, announced it would lay off 7,000 employees—about 10 per cent of its worldwide workforce—to save $1.8 billion in costs in 2009.
PTI reports the company would also suspend management-level salary hikes for the next year and curtail hiring.
Jet Airways was last month was forced to withdrew its decision to sack 1,900 employees.
The layoffs are primarily in Delhi and Bangalore and all the employees who have been asked to quit have been with Amex India for the past 15 to 20 years. Amex India has hired a consultancy to help sacked employees find a new job. The company currently has around 6,000 employees in India.
PTI reports the company is believed to have handed over pink slips to about 200 employees and senior executives.
The report on layoffs comes on a day when Prime Minister Manmohan Singh asked Indian companies to “refrain from large-scale lay-offs”. Singh on Monday warned industry leaders that layoffs may lead to a “negative spiral”.
“While every effort needs to be made to cut cost and raise productivity, I hope there will be no knee-jerk reaction such as large-scale layoffs, which may lead to a negative spiral,” Singh said on Monday.
American Express confirmed that it would cut jobs in India but said it cannot give a specific number. “Approximately 7,000 jobs are being eliminated company-wide which translates into about 10 percent of the company’s worldwide workforce,” the company said in a press statement.
“While we cannot give you specific numbers for India, we can tell you that we (Indian operation) are not the main focus for restructuring,” it said. “Reduction will occur throughout the company and across business units, markets and staff groups, primarily focusing on management and other positions that do not interact directly with customers.”
American Express, last week, announced it would lay off 7,000 employees—about 10 per cent of its worldwide workforce—to save $1.8 billion in costs in 2009.
PTI reports the company would also suspend management-level salary hikes for the next year and curtail hiring.
Jet Airways was last month was forced to withdrew its decision to sack 1,900 employees.
Monday, November 3, 2008
Layoffs in India
IBS Trivandrum Layoffs confirmed
Forward by Pooja
Flexing its muscles against the staff retrenchment in IT firms in the wake of economic recession, Kerala Government has ordered a probe into the dismissal of 20 professionals from Technopark-based IBS Software Services (P) Ltd.
CITU veteran and Labour Minister P K Gurudasan asked the Deputy Labour Commissioner (DLO) to probe the incident and see whether action could be initiated against the company as per the Industrial Disputes Act. “The Government has the responsibility to ensure that companies stick to labour regulations,” he said.
Accordingly, officials of the Labour Department visited IBS and sought service details of the staff. As Saturday was a holiday for the company, further inquiry would be held on Monday.
“The Labour Department cannot suo motu take any action in this regard. The dismissed employees should file complaints,” said DLO Abdul Nisthar.
Chief Minister’s IT advisor Joseph Mathew said the probe has send a clear message to the industry that the Government was committed to protect the interest of the workforce. “The Government had made clear that even SEZs would not be exempted from labour laws. The hire and fire policy of the IT industry is an ill effect of globalisation,” he said.
IBS CEO V K Mathews told The Indian Express that the Government move was in bad taste. It is a pity that Kerala raised a non-issue, especially when 60 per cent of the 2,500-strong IBS workforce hailed from the state, he said.
Mathews said the employees were shown the door as their performance was not up to the mark. He said the dismissed employees were given two months salary as per the contract.
Flexing its muscles against the staff retrenchment in IT firms in the wake of economic recession, Kerala Government has ordered a probe into the dismissal of 20 professionals from Technopark-based IBS Software Services (P) Ltd.
CITU veteran and Labour Minister P K Gurudasan asked the Deputy Labour Commissioner (DLO) to probe the incident and see whether action could be initiated against the company as per the Industrial Disputes Act. “The Government has the responsibility to ensure that companies stick to labour regulations,” he said.
Accordingly, officials of the Labour Department visited IBS and sought service details of the staff. As Saturday was a holiday for the company, further inquiry would be held on Monday.
“The Labour Department cannot suo motu take any action in this regard. The dismissed employees should file complaints,” said DLO Abdul Nisthar.
Chief Minister’s IT advisor Joseph Mathew said the probe has send a clear message to the industry that the Government was committed to protect the interest of the workforce. “The Government had made clear that even SEZs would not be exempted from labour laws. The hire and fire policy of the IT industry is an ill effect of globalisation,” he said.
IBS CEO V K Mathews told The Indian Express that the Government move was in bad taste. It is a pity that Kerala raised a non-issue, especially when 60 per cent of the 2,500-strong IBS workforce hailed from the state, he said.
Mathews said the employees were shown the door as their performance was not up to the mark. He said the dismissed employees were given two months salary as per the contract.
Tuesday, October 21, 2008
Layoffs in India
Jet Airways’ top 200 employees face 30% pay cut
Forward by Venkat
India’s largest private airline, Jet Airways, is planning to slash salaries of its top 200 officials by 25-30% in order to battle rising costs. Also, it has not yet decided whether to pay Diwali bonus for this year.
A top Jet Airways official said the proposed salary cuts would affect employees who are earning Rs 10 lakh and above per month. The salary cut may come into effect from next month, the official said, asking not to be quoted. He added that an announcement to this effect is likely on Saturday.
The senior employees likely to be hit include pilots and aircraft maintenance engineers, apart from management and planning officials. The official could not provide the quantum of savings the airline might achieve from the exercise. He said salary costs account for about 12% of Jet’s total operating costs while fuel costs are the highest at 33%.
When contacted, Jet Airways executive director Saroj Datta said: “We will do everything to reduce costs of the company. If necessary, this would also include salary cuts for the top management.”
However, the company has not yet made any decision on this, he added. Jet Airways’ tier I employees enjoy take-home salaries as high Rs 10-15 lakh per month, depending on their experience and positions.
Of its 13,200 employees, around 2,000 earn more than a lakh per month. These employees are mainly pilots and aircraft maintenance engineers.
Jet is also planning to rejig the salary structure of its reinstated cabin crew and other staff by shifting a major portion of their salary to the variable component. Also, the cabin crew is expected to accept a substantial reduction in their flying hours as Jet will reduce flight capacity by 30%.
Jet had reinstated 1,900 employees last week, within two days of laying them off. In 2007-08, Jet Airways’ salary bill had shot up to Rs 1,205 crore from Rs 938 crore in 2006-07.
This was mainly due to the recruitment of pilots, engineers and cabin crew required for the company’s expansion plans. This included a significant number of expatriate personnel.
An analyst told ET that Jet Airways will report a quarterly loss of more than $120 million (Rs 589 crore) for the three months ended September 2008. It had made a profit of Rs 143 crore in June quarter on revenues of Rs 1,983 crore. The board of Jet Airways is meeting on October 25 to consider the financial results.
The Jet Airways stock slipped 11% to close at Rs 217.30 in a rising Mumbai market on Monday.
India’s largest private airline, Jet Airways, is planning to slash salaries of its top 200 officials by 25-30% in order to battle rising costs. Also, it has not yet decided whether to pay Diwali bonus for this year.
A top Jet Airways official said the proposed salary cuts would affect employees who are earning Rs 10 lakh and above per month. The salary cut may come into effect from next month, the official said, asking not to be quoted. He added that an announcement to this effect is likely on Saturday.
The senior employees likely to be hit include pilots and aircraft maintenance engineers, apart from management and planning officials. The official could not provide the quantum of savings the airline might achieve from the exercise. He said salary costs account for about 12% of Jet’s total operating costs while fuel costs are the highest at 33%.
When contacted, Jet Airways executive director Saroj Datta said: “We will do everything to reduce costs of the company. If necessary, this would also include salary cuts for the top management.”
However, the company has not yet made any decision on this, he added. Jet Airways’ tier I employees enjoy take-home salaries as high Rs 10-15 lakh per month, depending on their experience and positions.
Of its 13,200 employees, around 2,000 earn more than a lakh per month. These employees are mainly pilots and aircraft maintenance engineers.
Jet is also planning to rejig the salary structure of its reinstated cabin crew and other staff by shifting a major portion of their salary to the variable component. Also, the cabin crew is expected to accept a substantial reduction in their flying hours as Jet will reduce flight capacity by 30%.
Jet had reinstated 1,900 employees last week, within two days of laying them off. In 2007-08, Jet Airways’ salary bill had shot up to Rs 1,205 crore from Rs 938 crore in 2006-07.
This was mainly due to the recruitment of pilots, engineers and cabin crew required for the company’s expansion plans. This included a significant number of expatriate personnel.
An analyst told ET that Jet Airways will report a quarterly loss of more than $120 million (Rs 589 crore) for the three months ended September 2008. It had made a profit of Rs 143 crore in June quarter on revenues of Rs 1,983 crore. The board of Jet Airways is meeting on October 25 to consider the financial results.
The Jet Airways stock slipped 11% to close at Rs 217.30 in a rising Mumbai market on Monday.
Friday, October 17, 2008
Layoffs in India
What Indian Law says about Termination
Forward by Kalyani
Termination of Employment
Existing regulations require companies to obtain government permission to close an operation or lay off workers in firms with 100 or more employees (service-industry companies, such as IT firms, are exempt). The Industrial Disputes Act, 1947 requires employers wishing to close an establishment to apply for permission at least 60 days before the intended closing date. If the government does not convey its decision within 60 days of the application, approval is deemed granted. A company can appeal against a rejection to the Industrial Tribunal.
Workers in an establishment that is closed illegally (that is, without approval) remain entitled to full pay and benefits. Dismissal for misconduct is allowed without notice under the Industrial Employment (Standing Orders) Act, 1959. The Payment of Gratuity Act 1972 entitles workers to a gratuity of up to Rs350,000 after five years of continuous service.
It is usually difficult for large companies to dismiss staff. Retrenchments and layoffs require full explanation to and prior approval from the state government. (Retrenchment under an agreement specifying a termination date requires no prior notice.) The last-in, first-out principle is usually followed.
Compelled by mounting competition to cut wage costs or consider moving out of high-wage locations such as Mumbai (Bombay), several companies have resorted to voluntary retirement schemes (VRSs) or redeployment. Beneficiaries under an approved VRS of a private-sector company are exempt from tax on monetary benefits of up to Rs500,000.
Termination of Employment
Existing regulations require companies to obtain government permission to close an operation or lay off workers in firms with 100 or more employees (service-industry companies, such as IT firms, are exempt). The Industrial Disputes Act, 1947 requires employers wishing to close an establishment to apply for permission at least 60 days before the intended closing date. If the government does not convey its decision within 60 days of the application, approval is deemed granted. A company can appeal against a rejection to the Industrial Tribunal.
Workers in an establishment that is closed illegally (that is, without approval) remain entitled to full pay and benefits. Dismissal for misconduct is allowed without notice under the Industrial Employment (Standing Orders) Act, 1959. The Payment of Gratuity Act 1972 entitles workers to a gratuity of up to Rs350,000 after five years of continuous service.
It is usually difficult for large companies to dismiss staff. Retrenchments and layoffs require full explanation to and prior approval from the state government. (Retrenchment under an agreement specifying a termination date requires no prior notice.) The last-in, first-out principle is usually followed.
Compelled by mounting competition to cut wage costs or consider moving out of high-wage locations such as Mumbai (Bombay), several companies have resorted to voluntary retirement schemes (VRSs) or redeployment. Beneficiaries under an approved VRS of a private-sector company are exempt from tax on monetary benefits of up to Rs500,000.
Wednesday, October 15, 2008
Layoffs in India
Jet Airways shows pink slips to 1,000 employees
Forward by Pooja
Riding the strength of its alliance with Kingfisher Airlines, another private carrier Jet Airways [Get Quote] has laid off up to 1,000 employees to rationalise its operations.
The entire force of unconfirmed staff is being laid off on a 30-day compensation package, a top Jet Airways official, who did not want to be named, told PTI.
The staff, which has been retrenched is from all across the operation and letters severing their services, were given on Tuesday, he said.
Jet Airways and Kingfisher Airlines, both of which account for 60 per cent market share in India had announced an alliance on Monday night to share their resources and routes.
Both Naresh Goyal of Jet and Vijay Mallya of Kingfisher are in Hyderabad to attend the Airshow.
“It is part of handling economic slowdown and carefully rationalising the operation,” the official said adding the downsizing is based on capacity, load-factor and traffic patterns.
The rationalistaion also seeks to optimise the operations in line with the rationalisation of its flight and he pointed out that the airline has stopped some of its existing flights including that to San Fransisco.
Earlier while announcing the alliance, both Goyal and Mallya had said that the coming together was in tune with the global practice of reducing killing costs and clarified that there was no equity involvement.
The alliance would work together on seven fronts, including route and code sharing as also sharing of crew, a move that would help them cut exorbitant cost that had been putting enormous pressures for the last 4-6 years.
News Update
Raj Thackeray threatens Jet Air over firing staff
Maharashtra Navnirman Sena chief Raj Thackeray on Wednesday said that no Jet Airways flight would be allowed to take off from Mumbai if the airline does not reconsider its decision to terminate the services of 850 flight attendants.
The MNS chief’s threat comes in the wake of the private airline’s decision to lay-off nearly 1,000 employees with a view to rationalise its operations.
Raj was talking to reporters after meeting a group of Jet employees, who called on him at his office ‘Rajgad’ in central Mumbai.
MNS activists will meet Jet officials on Thursday to discuss the issue.
Riding the strength of its alliance with Kingfisher Airlines, another private carrier Jet Airways [Get Quote] has laid off up to 1,000 employees to rationalise its operations.
The entire force of unconfirmed staff is being laid off on a 30-day compensation package, a top Jet Airways official, who did not want to be named, told PTI.
The staff, which has been retrenched is from all across the operation and letters severing their services, were given on Tuesday, he said.
Jet Airways and Kingfisher Airlines, both of which account for 60 per cent market share in India had announced an alliance on Monday night to share their resources and routes.
Both Naresh Goyal of Jet and Vijay Mallya of Kingfisher are in Hyderabad to attend the Airshow.
“It is part of handling economic slowdown and carefully rationalising the operation,” the official said adding the downsizing is based on capacity, load-factor and traffic patterns.
The rationalistaion also seeks to optimise the operations in line with the rationalisation of its flight and he pointed out that the airline has stopped some of its existing flights including that to San Fransisco.
Earlier while announcing the alliance, both Goyal and Mallya had said that the coming together was in tune with the global practice of reducing killing costs and clarified that there was no equity involvement.
The alliance would work together on seven fronts, including route and code sharing as also sharing of crew, a move that would help them cut exorbitant cost that had been putting enormous pressures for the last 4-6 years.
News Update
Raj Thackeray threatens Jet Air over firing staff
Maharashtra Navnirman Sena chief Raj Thackeray on Wednesday said that no Jet Airways flight would be allowed to take off from Mumbai if the airline does not reconsider its decision to terminate the services of 850 flight attendants.
The MNS chief’s threat comes in the wake of the private airline’s decision to lay-off nearly 1,000 employees with a view to rationalise its operations.
Raj was talking to reporters after meeting a group of Jet employees, who called on him at his office ‘Rajgad’ in central Mumbai.
MNS activists will meet Jet officials on Thursday to discuss the issue.
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