Cast aside in the best years
At a time when India’s educated and accomplished near the zenith of their careers, many have been thrust into the twilight zone. They have lost their jobs, but continue to be in denial mode
I am no soothsayer, but the world as we knew it has come to an end. And a quick scroll through social media sites like Facebook, Twitter, LinkedIn and Instagram reveals an alarming and grim reality. A host of my friends, contacts and followers, and many I have been following for years, have quietly changed their professional status to 'self-employed'. Till a few months back, I would have pinged them and congratulated them. But in today's new world, I know why they are suddenly 'self-employed'. Scores of India's educated achievers haven't suddenly all turned entrepreneurial in one go — they have lost their jobs.
The people I am talking about are all above 45 years of age, many over 50 years. In the peak of their professional lives, these are mostly engineering graduates from the various chapters of the Indian Institute of Technology (IIT) and/or MBAs from the prestigious Indian Institute of Management (IIM). At a time that they should be (and most were) nearing the pinnacle of their professional success after putting in at least 25 years each into their careers, building experience and achievements, they have suddenly entered the twilight zone.
Lowest hanging fruit
One can't really blame corporate India or companies large and small for this state of affairs. This was a working man's disaster waiting to happen, cutting across designations and classes, as India's economy moved southward quarter after quarter for the last few years. We first tacitly called it a slowdown — but a temporary blip in the country's skyrocketing corporate fortunes. But a Goldman Sachs report earlier this year late labelled the 18 months from January 2018 to July 2019 'the longest slowdown in the history of the Indian economy'. Today, we are nearly a year beyond that 'longest slowdown'. And these pursuant 12 months have seen depressive forces take an iron-grip on the country's economic and investments outlook, squeezing some very sensitive body parts. The global standard for a 'recession' is two consecutive quarters of negative growth. We are well past that number now – over five times that.
And as businesses have seen Return on Investments (RoI) shrink quarter after quarter, cutting across almost all investment categories — be it the working middle class, the high net-worth individual (HNI) and corporates or the retired senior citizen, they have been cutting back on their production and output numbers, more so as inventories sitting on store shelves and warehouses just haven't moved out fast enough. Cost-cutting began, and the easiest way to cut spends is to remove those that can't say no or ask why — the human factor, the lowest hanging fruit. Sack the staff.
Ruthless HR departments
Retrenchment is an inevitable part of a manager's responsibilities. I have done my own share of asking team members to leave over my 20 years as a top management person at some of India's largest corporates. But I indulged in hours of discussion with my soon-to-be-departing team-mates, counselled and guided them on the path forward, professional and personal. I also insisted on the supporting teams in the company to take care of these exiting people and ensure a dignified and comfortable exit — as comfortable as such an exit can be.
But today, we are hearing repeated, shocking instances of corporate unprofessionalism and human indifference, laying bare the complete lack of ethical practices at many companies. Some are even adopting a ruthless and callous approach to layoffs. These till-recently most-prized possessions, the employees, some part of the management, are being ruthlessly told off by human resources (HR) departments. Many, many of the senior-most employees at our top and most recognised blue-chip firms are being asked to leave at 15 minutes' notice. Or else…
"Please put your access card, laptop, mobile phone SIM card and cupboard keys on the desk and leave the premises with your personal belongings. Do not come from tomorrow. We will treat this date of the next month as your last working day in your relieving letter. Your salary will come on time. You may email us for your provident fund (PF) and gratuity claims. Bye. All the best…"
What's presented above is a verbatim account of the eulogy delivered to five of my friends in one of India's top corporates over the last two months — all were earning over seven-figure salaries each year. A rather summary way of being sacked, asked to leave and never come back. Surely, execution by guillotine would be kinder.
What has gone wrong?
We spoke to some analysts on the rising unemployment numbers among the senior echelon in India's largest corporates and came up with the same two old vitiated culprits — demonetisation and the Goods and Services Tax (GST). "Demonetisation largely killed smaller businesses. GST's inverted levy structure was clearly not thought through. Why introduce a taxation mechanism where the levy on raw materials is higher than on finished products, which reduces competitiveness and increases the cost of capital? We anyway had a slowing economy and sagging industry segments, with revenues and profitability plummeting each day. Job cuts were inevitable. And then came COVID-19 and wiped out what was left," says a senior analyst, who bluntly admits he has no idea how long he has a job.
For corporate India's senior and most successful, the two decades from 1995 to 2015 were the best ever. Salaries increased 20-30 per cent year on year, doubling every 4-5 years, and job-hopping ensured an even faster growth. Some sunrise industries such as civil aviation, telecom, power, hospitality, healthcare and financial services ensured an even faster growth — suddenly, the salaried could be wealth-creators. Those were the days of ESOPs, 100 per cent salary hikes for millions of Indians who jumped ship and shifted jobs, or industry sectors. The Indian economy was riding its biggest crest, ever, and everyone with gumption and even some capability rode this sea horse to sudden riches and fame.
Then came the sunset
Years 2016 through today have been the worst for corporate India since the introduction of economic reforms in the early nineties. For the last few years, consumer spends have dipped alarmingly, as people fervently clutch on to the money already in their pockets. Decreased consumption has hit the manufacturing sector hard over these years, with performance and profitability taking a nosedive. New investments and capacity expansion have only been mythical, for there is no point in pumping in more monies when demand is plateauing or slipping. Existence and survival are the only viable mantras.
But why are India's largest companies moving with such haste to shed even those employees who have worked for years and been loyal and good contributors to growth? Surely, these corporates have the staying power to pay salaries for a few months, at the very least, with or without COVID-19. The answer is clear as pie — businesses large and small, especially large, have realised over the last three months that there is no revival happening anytime soon, and the time to tighten belts, cut costs is now. Money in the bank is money in the bank. And the more senior an employee, the more expensive he is. Even in kind-hearted companies, one senior asked to leave equals 10 juniors surviving for another few months. Tough, yet simple. And understandable.
Embrace the new world
The numbing reality is that the wounds inflicted on the system over the last few years are deep-seated and venomous; not even a miracle can restore good health anytime soon. There is no quick-fix solution. To quote a telling example, Toyota Motors India, which recently reopened its manufacturing facility near Bengaluru after months, shut it down last mid-week as one employee tested positive for COVID-19. They are now sanitising the 350-acre facility and will reopen only after 15 days.
These instances will recur. In this new world, we all have to learn how to conduct business in a new way. For the newly 'self-employed' too, there is life ahead. They only have to realise, accept and socially admit the truth for what it is, and find a new path forward. For each time a door closes…
The author is a business analyst and communications specialist. He can be reached at firstname.lastname@example.org. Views expressed are personal