Published on Dec 07 2019

The previous 2 years have become nothing more than a nightmare. It has come across so many organisational changes and market fluctuations that leads to several stringent steps taken by many companies. Layoffs directly or indirectly sends a message that companies are in search for performers and individuals who possess relevant work experience and skills that are needed for a demanding job role.

On the other hand there are two great forces that are transforming the very nature of work, it is automation and ever fiercer global competition. To keep up the pace and their position in the market as compared to their competitors, many organizations have had to rethink their workforce strategies. This often includes making changes that are disruptive and painful like turning to episodic restructuring and routine layoffs. But, this step in the long term brings both damage to the employee engagement and company profitability.

Let us consider the case of the very well known mobile company, Nokia. At the beginning of 2008 there was a high increase in their profits. The senior managers at the Finnish telecom firm were celebrating a 67% increase in profits that year.

There was a fierce competition from low-cost Asian competitors had driven Nokia’s prices down by 35% over just a few years. At the same time, employee/ labour costs in Nokia’s Bochum plant in Germany had increased by 20%. There was only one solution in front of the management’s eyes: Bochum had to go. They decided to layoff with the plant’s 2,300 employees.

The anger spread and nearly a week later, around 15,000 people protested at Bochum. German government officials investigated and demanded that Nokia pay back subsidies. It was followed boycott of Nokia products. The news was filled with videos of crying employees and protesters crushing Nokia phones.

Now the scenario has been repeated in several sectors like IT and Automobile that has been laying off quite a large number of employees. This is because of the infusion of Artificial Intelligence and automation. These two innovations have changed the corporate world beyond imagination.

Jobs that were once being done manually by several employees taking a significant amount of time, can now be done by a computer within a short span. Thus doing away with the need for a person to manage it.

One of the reasons is the lack of skills required. Underperforming employees and the ones who lack the relevant industry skills are removed from their jobs by the organisation.

Two main industries that are facing enormous amount of layoffs are Automobile and IT sector of India


Two well-known multinational companies are facing layoffs where the people in mid-senior level positions are being removed from their current job positions.

Indian MNC Infosys and US-based Cognizant are letting go of thousands of employees to cut down their expenses and restructure their organisations. Infosys are on a brink of laying off as many as 12,000 employees while Cognizant is removing 7,000 from jobs over the next few quarters. It is laying off around 7,000 employees over the next few quarters.


The recent economic slowdown has impacted the automobile industries on a large scale. These companies are facing a lot of crisis. The latest report from the industry says that around two lakh jobs have been compromised and cut by automobile dealerships across the country. The layoffs have occurred since the vehicle retailers are forced to choose the only option of cutting manpower in order to overcome the impact of the unprecedented sales slump.

This has a huge impact on several universities. A few years ago, firms hired hundreds of employees in a hope that training would suffice to change their employability factor. This was mainly because companies changed the way of hiring: while earlier they would hire freshers in a large number. Their strategy has now shifted to just-in-time contract hiring. They hire much less students than they used to do before. The reasons are either the students are not equipped with the knowledge on the latest technologies or the company changed their hiring practice and started recruiting only the sufficient amount of candidates for the job roles offered.

Universities need to understand that technology is not constant at all and it keeps on changing. But the current curriculum provided by these institutions are not in sync with industry needs. They need to change the skillsets and subjects according to the changing needs of the industry to make their students industry-ready.

Even though these layoffs prove a significant reduction in costs and extra manpower expenses to the firm but it also leads to other impacts like Decreased Customer Loyalty.

Laying off people can have a huge negative impact on customer retention. These layoffs indirectly sends a message to customers that it is undergoing some sort of crisis. This repels customers from buying the products of that particular company.

To know how to find a job in recession time refer to the article.

On the other hand the employees face emotional distress. The person who is laid off suffers the most distress, but remaining employees suffer emotionally as well. A sense of fear gets in their mind thinking that they might be the next to get laid off. Layoff disrupts the status quo. Employees have to pick up extra responsibilities and prove themselves again and again and form new work relationships, which can be equally stressful. The productivity level of employees who work in fear is likely to go down and this situation is even more damaging to the company.

These are the impacts that the working class of India is facing which has a huge impact on the future too.

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