The Automotive Component Manufacturers Association had last month warned of 1 million potential job losses and had called upon the government to do something urgent to arrest the deepening slowdown
Mumbai: With the deepening crisis in auto sector, which has seen the worst volume plunge in two decades in July, independent HR industry feels the maximum impact will be on temporary workers followed by service roles in sales and marketing along with R&D as OEMs are forced to cut production.
While media reports say the sector has already culled 3.5 lakh jobs since April, the national OEM body Siam on Tuesday said at their level itself more than 15,000 employees were laid off this fiscal, and thousands lost their livelihood at the dealerships side where hundreds of them have been shuttered.
The Automotive Component Manufacturers Association had last month warned of 1 million potential job losses and had called upon the government to do something urgent to arrest the deepening slowdown.
The sector employs over 35 million, directly and indirectly and accounts for nearly half of the country's manufacturing output.
The auto sector has been on a downhill since the past 18 months or so after the government flip-flop on ICE engines and the push for electric mobility without any policy or financial support.
Slowdown in the auto sector is a global phenomenon and India is no exception and companies are leveraging the flexibility available at their hands like cutting down/shuttering plants temporarily to minimise their cost, CIEL HR Services chief executive Aditya Narayan Mishra said.
A sustained slowdown will push companies to optimise cost further by laying off high cost resources who are not critical for the day-to-day operations, he opined.
"The major impact will be on the manufacturing side, especially on the temporary workforce as companies cut down production. The other segment that will hit the most will be in the mid- to senior level jobs involved in the strategic positions like R&D or product development," he said.
Laying off permanent employees is one of the last resorts companies adopt to adjust their cost, however, there will be cascading effect on bonus, increment among others if the slowdown deepens further, he added.
According to Munira Loliwala, a business head at TeamLease Services, service roles in sales and marketing are facing the heat at the moment as they are less tolerant.
"We expect the slowdown to be arrested in the next few months. However, some roles which may see a drop are sales and R&D roles. Some other segments which are likely to see the impact are dealers, distributors and channel partners. Falling sales is affecting the components industry," she added.
Michael Page India regional director Mohit Bharti blamed the disruptions taking place in the sector, leaving customers uncertain.
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Last Updated Aug 14, 2019, 8:03 PM IST