Amidst rising debt which has crossed Rs 25,600 crore, and falling sales, Macrotech Developers, formerly Lodha Group, has given pink slips to around 400 employees.
However, a spokesperson for the largest realty player in India attributed the lay-offs to performance reviews.
The retrenchments at the company promoted by Mumbai BJP chief Mangal Prabhat Lodha come at a time when the economic growth has dipped to a six-year low of 5 per cent, which has led many to fear if the spectre of job losses across sectors awaits next.
The Lodha group company was downgraded with a negative outlook by two global ratings agencies last month, Moody's Investors and Service and Fitch Ratings on concerns on liquidity and falling sales.
According to a recent ratings issued by India Ratings, a division of Fitch, the gross debt of Macrotech rose 13 percent to Rs 25,640 crore in FY19.
"The company, across its projects, gives direct and indirect employment to nearly 50,000. These lay-offs are a part of our annual performance appraisals," a spokesperson told PTI.
The impacted jobs include mid-to-junior level employees of the company and also contractual resources, sources said.
These mid-to-junior level employees and contract workers, including engineers, architects and salespeople, were working at various projects, said the source.
The president of Association of Property Professionals, a forum of brokers, Ashwin Jain said lay-offs have become common in the realty space
He added there was an expectation that after the elections, things would get back to normalcy, but it hasn't happened yet.
Lodha currently has nearly 42 under-construction residential projects, including The World Towers and Lodha Park, comprising several high rises in central Mumbai, as well as affordable housing project like the Palava City.
Its sales grossed around Rs 3,000 crore in the first five months of the fiscal and expects to close the year with booking of around Rs 7,900 crore.
"We are not much worried about debt, as there is process underway to reduce it," Abhishek Lodha told PTI in a recent interview.
According to rating agency Icra, central Mumbai alone has unsold inventory worth Rs 45,000 crore as of end June. In volume terms, the micro-market accounts for 32 percent of the total unsold units in the megapolis.
Due to the prevalent market conditions, its second attempt to hit the capital market with Rs 4,500-crore IPO was deferred once again.