Economy is up but India Inc cuts jobs

India Inc reduced its headcount by 18,378 in 2003-04.

It is jobless growth all over again. Not only is the Indian corporate sector not creating new jobs, it is destroying jobs as well.

And that is happening despite stellar growth in company profits. Indeed, India Inc reduced its headcount by 18,378, or 0.6 per cent, in 2003-04.

However, the decline in the number of jobs in the corporate sector would have been far higher had it not been for the information technology industry having created 45,872 jobs.

Excluding the IT industry, the manufacturing sector shed 64,626 jobs, or 3.1 per cent of jobs in the sector.

Much of this loss in employment in the manufacturing sector occurred in public sector undertakings (PSU). The 100 manufacturing sector PSUs in a sample of 800 companies studied by the Business Standard Research Bureau cut their staff strength by 56,835 in 2003-04, or by 4.47 per cent.

More than half of these job losses, 28,545 to be precise, arose because three National Textile Corporation mills shut.

Of the 800 companies studied here, as many as 382 companies reduced their staff strength in 2003-04, adding up to 100,953 jobs lost. Only 293 companies created fresh jobs, a mere 82,575 in 2003-04.

The staff strength of around 125 companies remained unchanged. In the private sector, manufacturing companies reduced their headcount by 7,791.

It is not all gloom though. Indian pharmaceutical companies beefed up research and development activities by hiring more personnel, though the larger share of new jobs added was in marketing and sales.

Eleven Indian companies, led by Nicholas Pharmaceuticals, Torrent Pharmaceuticals, Aurobindo Laboratories and Matrix Labs, added.

The six spinning and weaving companies in the sample increased their headcount by 2,950 in 2003-04 on the back of booming exports of readymade garments.

Buoyant demand for commercial vehicles saw Tata Motors and Ashok Leyland add 651 employees. Other notable job creating sectors include construction, engineering and infrastructure development.

The services sector, in particular, created plenty of jobs, particularly in software and private banks. IT companies in software, hardware and data sourcing, created more jobs than any other sector: 26 IT companies increased their staff strength by 45,872 or 39.5 per cent, taking the headcount in the IT industry to 161,882 in 2003-04.

Private banks, which are expanding their retail business reach, added 5,551 employees.

Infosys Technologies remained the largest single recruiter in 2003-04, adding 7,988 IT engineers and managerial staff. Wipro added 7,422 employees, while TCS increased its headcount by 4,607 to 30,121.

Satyam Computer and HCL Technologies increased their manpower by over 4,000 each, while Digital GlobalSoft and ICICI Bank increased their staff strength by over 2,500 each.

 Pink slips fly

• India Inc reduced its headcount by 18,378 in 2003-04
  
• Manufacturing shed 64,626 jobs or 3.1% of jobs in the sector
  
• 100 manufacturing sector PSUs, in a sample of 800 companies studied by BSRB, cut 56,835 jobs in 2003-04
  
• As many as 382 companies in the sample reduced their staff strength, adding up to 100,953 jobs lost