Views on News

I’m back to Bangalore and back to blogging :-). Ah, I was off from blogging for more than two weeks now…well LOADS of work at office, new marketing initiatives and alliances to deal with, coupled with frequent travelling! To add to that maid on unplanned leave for more than ten days now :-(. Life was frenzied and yeah it was one of those periods when you feel – oh hell, work life is so damn demanding in a start-up! But why start-ups, I think these days work life is full of pressure and demands for most of us in this downturn period. Everybody is speaking of lay-offs, pink slips, leave without pay and salary cuts! Everyone is trying hard to put in his or her best to survive the giant known as layoff! In fact wherever you go the common topic of discussion remains the same. I met this interesting elderly gentleman on my flight back to Bangalore last night, he is having his own company in Seattle and he shared some interesting statistics regarding layoffs. Whatever I can remember, I am sharing those here:

• Massive layoffs in current times leading to increasing unemployment is one of the worst which job market could have ever faced.
• Jobless rate has reached approx 8% now which is the highest in last 25 years, it was 6.1% in 2003 and 7.8% in 1992.
• There are lots of companies which are resorting to mindless layoffs in a panic situation. Not every company needs to go for such huge scraping.
• Wages are once again going to be monopolized now by the employers as there are many job seekers for lesser number of vacancies.
• These dramatic layoffs will only lead to further worse economy. More credit in the market as people are unable to pay their EMIs, reduced expense which is leading to less sales for most of the consumer oriented companies.
  

It was a good insightful discussion but well it was scary, really scary. Nobody knows exactly when this situation will improve…everybody is just predicting and praying!

I somehow knew that this is going to come the moment I saw Jet-KF alliance news on Monday late night. Though both the spokespersons kept on insisting that this alliance would be in the benefit of consumers and industry but the first thing which came to my mind was – alliance and that too joint operation deal, well looks like they are definitely now gonna trim down their team size. And here we go, my apprehension turned out to be true when I read today’s TOI with headline “Jet Air lays off 850 flight attendants”! As per TOI dated 15th Oct’08 – The tremors brought about by the worst downturn yet in the airline industry were felt on Tuesday itself, hours before the first Jet Airways flight of the day took off. Said a crew member, “About three and a half hours before a flight, the office transport reaches your home to pick you up. In the wee hours of Tuesday morning, hundreds of cabin crew members in Mumbai who were rostered for early morning flights waited in their uniforms to be picked up.” When the worried flight attendants called up the airline dispatch office, they were told they had been de-rostered till further notice.

If TOI is to be believed then what a sudden and scary layoff!!! It’s quite frightening to read the newspaper headlines these days, either there are news of terrorist attacks or there are news of bankruptcy and lay-offs. What started few weeks back as a small economic recession has now become a global downturn of all times. As per analysts, this downturn is far worse than dot com doom and infact first of its kind in last 80 years. Lay-offs started with IT and financial sector but is now engulfing every other industry – be it aviation, retail or hospitality. So, many people have lost their jobs and god knows how many of them would be having car loan, house loan, personal loan or this-that kind of loan with monthly EMIs hanging like a sword over their head and in this tough time of recession it’s really unpredictable if they will get any other job immediately! The worse is that most of us in today’s fast generation never believed in the power of saving and deposits. In the generation of high disposable income almost all the money have been disposed! It scares you when you listen to the experience of lay-off from somebody close to you, it scares you when you listen that some of your very well-settled friends with quality degrees and high paying jobs in US based MNCs have been asked to leave for India over night. It scares you to realize that he is left with no cash to support his needs and it scares you to realize that many of them are depressed to the extent that they intend to give in to the pressure of life. Well to be honest, my intention is not to scare anyone rather express my realistic feelings regarding this issue. And it’s not too late for all of us to be cautious and take some basic steps to deal with this bad time (of course to whatever extent it is possible…). Here are some of my thoughts which I think we can take in person to be prepared for the bad days:

• Please remember “Cash is King” atleast for a downturn period like this. So, please try to not go for mindless investment and deposits. Ask those who are bleeding under the stock-market blood-bath or ask those who have lost money because of bankruptcy.
• You think you are getting underpaid, well think again – atleast you are getting paid. Ask those who have lost their job overnight without any backup.
• Not having job satisfaction? You think you deserve a better opportunity? Well you definitely can get a better opportunity, but think again before quitting your already established job…atleast you are settled in one job and don’t forget that whenever there is trim down movement in any company, the first lot to be effected is the new joinees or the probation ones.
• So, planning to start a new business, why not afterall entrepreneurship is the “in” thing in India? Well, I am not trying to de-motivate you and I have immense respect for those who have the guts to take the unconventional path and start something on their own but all I would like to say is think again if you are starting some web based or social media company. Gone are the days of easy VC funding and heavy buy-outs! Atleast for next few months for sure.
• Thinking to upgrade to a new car or a bigger house? Trust me it can wait for some more time…atleast you have a vehicle or a shelter on your head. Its really not the time to increase the burden of your EMIs.
• Revisit your day to day expense and remember our parents and their good old habit of saving money. With my own experience I can tell you that there are enough expenses which we make just like that. For e.g., in a city like Bangalore, a meal for two in any normal restaurant can cause you an expense of easily Rs. 800-1000 and well for foodies like me and my husband these random eating out used to happen just any day or any moment. Trust me eating more at home on regular days is helpful both ways – it keeps a check on the weighing scale pointer as well as on our wallets :-). And for those occasional cravings definitely you can party out once in a while. Even small one on one savings like these can lead to a noticeable amount at the end of an year.

I know the situation in India is not that bad as of now as compared to US but no one knows if it can happen in India as well. It really hits you hard when you realize that such lay-offs have happened with your close friends and god forbid, it can happen to you too. So, be cautious, work hard to be in top list in your company and save smart for those darker days.

Aside: This is my first post in the series of “after-effects of downturn”, I have some other observations as well as concerns which I will post in my subsequent series. I was speaking to one of my ex-colleagues who and her husband have been laid off from very reputed companies in US. Talking to her really disturbed me a lot! They are coming back to India next week and I pray that they get a job in India soon as even they have a family and those intimidating EMIs to cater to!