The Indian companies are trapped between the Scylla of worsening economic condition world over – e.g., rising nationalism and its corollary protectionism, slowing world economy amidst the huge government, corporate and household debt overhang, increasing trend of automation amidst socialist economic policies etc., – and the Charybdis of increasing government interference, in the form of demonetization policy or increasing regulations or rising taxes etc., in the Indian economy. One of the major results of these worsening overall conditions is unemployment. Major Indian companies are busy downsizing their workforce to cut down the cost and remain competitive in the market e.g., Wipro , which is a third largest information technology service provider company in India, recently fired some 300 to 600 of its workers; another IT major Congnizant fired some 6000 to 10000 of its non-performing workers; Infosys, another IT giant, is planning to sack around 1000 or its senior to mid-level employees; another IT firm Tech Mahindra has fired hundreds of its low performing employees; Flipkart, the giant online retailer, also fired 700 to 1000 of its employees to restructure its cost structure; Tata Teleservices recently fired 500 to 600 of its employees. Not only this, Cap Gemini, a French IT company, India head recently said that around 65% of total IT workforce in India cannot be retrained; he said, a majority of its workforce cannot imbibe the required emerging skill-sets, and warned of high job losses at the middle and senior levels!
The Narendra Modi government’s minister of State for Planning Mr. Rao Inderjit Singh in the Rajya Sabha recently admitted that the unemployment rate in India is rising. I am sure the numbers presented by the government are a gross understatement of the difficult time that the Indian economy is facing right now.
All these difficulties are just going to surmount in future because all over the world protectionism is rising its ugly head, and the greater depression that started in 2007 with the sub-prime crisis is still not over; in fact, the bubble has just gotten bigger since 2007, and so the coming bust will be even more bigger and painful. When this greater depression will be over, it will leave behind debris of fallen economies, Indian economy included, all over the world.