Job losses now spreading to non-export sectors

Lay-offs mount in manufacturing, service segments: Study.
New Delhi, March 10 After scorching export-related sectors, job losses are spreading fast to domestic units across the organised segments of the manufacturing and service sectors.
While employment has progressively fallen every month since October last year, fresh estimates for January 2009 show that employment in units focussed on the domestic market declined more rapidly than that in export units which have borne the brunt of lay-offs so far.
According to Labour Bureau data till January 2009, the information technology and the BPO (Business Process Outsourcing) sector has seen the employment trend getting reversed in January, after being the only sector to record an increase in employment during October-December, 2008.
While the global meltdown has impacted IT-enabled services, the dip seen in January in employment rates in the sector is, actually, on account of job losses in firms catering to the domestic industry.
The other affected sectors are transport and metals.
The survey pegs the cumulative job loss for October- January at 5.89 lakh. It is, however, limited to the organised sector of the economy. The lay-offs in the unorganised segments, which constitute over 90 per cent of the total labour force, could be much higher.
“While the direct impact of the global trade slowdown on traditional export industries such as textiles and garments, gems and jewellery, among others, has been reflecting on employment numbers in these sectors so far, higher job losses in the non-export sectors is a new phenomenon.
“But, to conclude that this is a trend, we would have to wait for the data for February and possibly March,” an official in the Ministry of Labour and Employment, which commissioned the study, said.
An analyst looking at the employment sector said the job losses in the domestic IT and BPO sectors, as shown in the January data, could be a fallout of the slowdown in the private banking and financial sectors, as well as services such as travel and tourism. Dip in wages
Over and above the decline in the employment numbers, the survey also points to a dip in average wages received by employees across the surveyed units. The average monthly wages, collated for both direct and contract workers, showed a 0.26 per cent decline in January. The average monthly decline during October-December 2008 was at 3.45 per cent.
The Labour Bureau’s ‘quick thin sample survey’ for January covers eight sectors and 682 sample units spread over 11 centres across seven States.
Source: HBL