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Hurt by subdued markets and economic slowdown, Lanco Group, which has interests in infrastructure, power and realty segments, has retrenched about 50% of its 8,000 workforce during the last 15 months its projects suffered, sources said.
The Group has cut down its workforce to 4,000 by the end of March this year and around 400 employees so far in the current fiscal. The Group currently has 4,100 to 4,200 employees, sources said.
"While around 3,500 people were given pink slips during the last fiscal (2012-13), around 400 employees were asked to leave during the last quarter. Most of the employees were taken in anticipation of taking off various projects, which has not happened," sources told PTI.
When contacted, T Adi Babu, Lanco CFO, merely said: "The headcount of the company, including international business, will be 5,100."
According to the latest annual report of the company, Lanco had trimmed its employee expenses, including recruitment and training, to Rs 632 crore during 2012-13 as against Rs 736 crore in the previous fiscal.
"During the year 2012-13, employee benefits expenses decreased by 13% over the previous year. The decrease was on account of a fall in total number of employees in the group due to a slowdown in development of future projects as a result of a slowdown in economic activity in the country," the annual report said.
Despite 25% growth in income, the company posted Rs 1,073 crore loss in the last fiscal on consolidated basis, against Rs 112 crore loss during 2011-12.
Gross Interest and Finance charges on consolidated basis amounted to Rs 2,421 crore in comparison to Rs 1,054 crore due to increase in loans and working capital requirements for project execution.
According to Jagannadham Thunuguntla, strategist and head of research, SMC Global Securities, the slowdown in economy is seen in every sector, more so in infrastructure space.
Lanco Infratech, the holding company of the Group, recently said it had initiated the process of corporate debt restructuring (CDR) as per Reserve Bank guidelines.
The company had said it is in the process of corporate debt restructuring (CDR) for standalone debt of Rs 7,500 crore.
Consolidated net debt of the company was at Rs 34,770 crore as on June 30, according to a filing to bourses.
