Three-fourths of companies may cut manpower, says Ficci-Dhruva Survey

The slump in demand and decline in sales revenue owing to the spread of the deadly coronavirus is set to continue throughout the current financial year, leading to a massive job loss, a survey undertaken jointly by industry body Ficci and Dhruva Advisors highlighted.

It added that the magnitude and speed of collapse in economic activity in India in the last few weeks was unprecedented and almost 72 per cent of the respondents to the nationwide survey reported that Covid-19 would have a ‘high to very high’ level of impact on their businesses.

Nearly three-fourths of the 380 surveyed firms across sectors said that they may look at reduction in manpower in their respective companies.

“There is a need to render immediate and sizable support to industry to protect people, jobs, and enterprises. Industry members are reeling under severe financial stress and are in urgent need of ample liquidity to ensure business continuity. We are hopeful that the government will introduce a series of measures in quick succession to support demand ensure business continuity,” Ficci Sangita president Reddy said.

The spread of the disease and the lockdown have also impacted companies’ expansion plans. According to the survey, most companies would defer their expansion plans, even after getting obtaining the required approvals, for a period up to six or 12 months. Besides, 60 per cent of the surveyed firms said they would defer their fund-raising plans for the next six to 12 months, while nearly 25 per cent have shelved the same.

With domestic demand plummeting to record low levels, companies were hoping that exports may provide an outlet for them to energize growth. “While 43 per cent of the surveyed firms reported that they do not foresee an impact on exports, nearly 34 per cent said that exports would take a hit by more than 10 per cent,” a Ficci release said..