With order books tapering, staff at infra project sites gets thinner

With order books tapering and projects getting delayed, companies are retrenching employees

The slowdown-hit infrastructure sector has been trimming staff, mostly at the sites of projects that have failed to take off. Construction and capital goods companies, whose order books have thinned down, are among the hardest hit.

Infrastructure developers, too, have been facing the heat of slowdown, with many coal-based power projects stalled owing to lack of fuel and several other infrastructure projects stuck due to delay in environmental clearance, as well as non-availability of land.

There are many projects which have neither progressed nor completed their milestones. And many others are still waiting for clearances. Some stalled projects are showing signs of take-off with the government taking interest in them. However, there are many greenfield (new) projects that might take time off to start, said Umesh Agarwal, associate director at PricewaterhouseCoopers.

A senior executive of a top infrastructure company, which recently retrenched 20 employees at its sites, said most of the people who were removed were from the sites of hydro projects. We had hired them hoping that the projects would have been half way through their clearances now.

Hyderabad-based GVK Infra is known to have removed 35-40 employees from the corporate and energy verticals. An e-mail questionnaire to the company did not elicit any response. Lanco Infratech, which has been under the weather due to non-receipt of payments from state electricity boards, has also reportedly struck the names of 400 employees off its books in the past six months.

Most of the people we have removed are at project sites and engineering, procurement and construction business as few orders are coming by, said a Lanco company official, on condition of anonymity.

Corporate-level retrenchments of mid-management level staff are a much-expected move, according to human resource experts.

The infrastructure sector has huge debt in its books. Till this problem is resolved, the sectoral outlook is expected to be bleak. With rising debt and infrastructure non-performing assets on the rise among public sector banks, companies are looking at cost control. While lay-offs should be the last resort, it could be that they have exhausted all other avenues, said E Balaji, an HR expert.

Even as regulatory teams of infrastructure companies have been on a lobbying overdrive, people who are entrusted with the responsibility of bringing in new projects and engineers entrusted with the job of execution have become redundant, experts pointed out.

There have been retrenchments in the sector in the past six months to one year, said Agarwal. According to him, hiring would come back as stalled projects gather steam, thanks to government initiatives to hasten the projects progress.

SLOWDOWN BLUES PLAY ON

* Infrastructure developers have been facing the heat of slowdown, with many coal-based power projects stalled owing to lack of fuel

* Layoffs of mid- level staff is widely expected, according to human resource experts