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Jet Airlines announced plans to sack around
1,000 workers in September 2008 after an
earlier lay-off of 1,500 employees. Microsoft send lay-off notices to around 3,000
employees. Various well-known institutes like IIMs, IITs
have registered a decline in placements and campus recruitments this year as against previous years.
A report by the Ministry of Labor, Government of India, states that five lakh people were laid off
in the country in the last three months of fiscal
2008-09. Nowadays, we are frequently coming across such headlines, on retrenchments by
various companies, in the newspapers. Lay-offs,
pink slips and lesser campus recruitments has made the younger
generations doubtful about job prospects after completing professional
courses like MBA. Today, the youth are insecure
and skeptical about the job market. The global financial sector is caught in a turmoil.
The economic crisis began with the subprime crisis which affected almost everybody across
the globe. The downfall of big economic players
such as Lehman Brothers and a part of AIG filing
for bankruptcy, etc., has shaken the economy of
the world. The economic downturn in the global market has resulted in a crisis in the
employment market. According to a US Department
Report, the downslide of the economy has led to a
job loss of around 4,03,000 and 5,33,000
respectively in October and November 2008, in the
US economy. The unemployment rate has reached 6.7%. This downturn has influenced
big economies like India also. When our MBA aspirants and those who are pursuing MBA
see this data they will definitely question the
sanity of pursuing a career in such a field where jobs
are few and people are being laid off.
Almost one and a half years ago the Indian economy was thundering ahead like a
juggernaut. But the sudden wave of recession
brought everything crashing. So, let's first understand
the meaning and causes of recession. Recession is
the decrease in the GDP of a country for two, or
more than two consecutive quarters. It also leads to
a decline in trade and employment. The main reason for recession in the current scenario
is crisis in the US caused by subprime lending, as
a result of which some major banks like Lehman Brothers and AIG became bankrupt. Big
investors from the US pulled their money back from developing countries such as India, and lack
of funds resulted in recession throughout the world.
The impact of recession on India is big and manifold. Lehman Brothers
had a BPO operation in India with around 2,500 employees, all
of whom were given pink slips. Foreign investors pulled out their money from the Indian
stock market, which caused a sudden crash in
India. Lack of funds caused various companies to
close or stop their projects. As a result,
companies started laying off their employees. Big
concerns such as Jet Airways announced plans to lay
off more than 1,000, TCS terminated around 500
and almost around 700 employees in IBM were fired
in one go. The story doesn't end here. The
economic recession has reduced the campus placements
of the students. Big recruiters such as Wipro, TCS and Infosys have reduced campus
recruitments. Infosys planned to hire around 25,000
employees in 2008-09, which is 29% less than the
total recruitments of last year. |
