To beat economic slowdown, firms adopting manpower restructuring: Assocham

At a time when the country's economy is not in the pink of health, scores of companies are adopting manpower restructuring to cut cost, reveals a research report.

The report Tuesday by industry lobby Assocham cautioned that the situation is set to worsen in the coming days.

"More and more companies are approaching the consulting firms seeking solutions to cut costs so that they can weather the difficult economic environment vitiated by adverse global situation, pressure on currency, sinking stock market, high interest rates, inflation and limited elbow available with the government to bail out the troubled industry," said the Assocham 'Research Report on Impact of Slowdown on Employment'.

It reveals that companies in infrastructure (roads, ports and airports), gems and jewellery, educational solutions, realty, non-banking finance companies, especially in the gold-loan segments, media, public relations and advertising are resorting to manpower rationalising.

"The sad part is that the situation is likely to become worse, rather than improve, in the weeks to come and the pain would only increase. The feedback suggests that employers in the severely affected sectors are desperately trying to limit the damage as much as they can," it said.

If the situation does not improve in the near future, the negative fallout would be felt on those sectors as well which are driven by job markets like consumer goods, white goods, electronic gadgets and passenger cars, it said.

The eroding consumer confidence would also affect tourism and its constituents like hotels, restaurants and tour operating. The airlines would face the heat further, the report suggests.

It says: "At this point of time, the industry, trade and business are looking up to the government for finding out-of-box solutions to deal with the present situation, which is partly a function of the global factors like the US recovery."