Facing backlash, firms offer benefits to fired employees


MUMBAI : The social media backlash to widespread job cuts by technology behemoths and startups alike has prompted a section of Indian companies to offer extended benefits to retrenched junior and mid-level employees, but CXOs are increasingly being denied a fair deal.

While some companies are offering benefits beyond the terms of contracts of retrenched employees like extended corporate medical cover till the end of the policy tenure to help them navigate through the tough times, even if they are not on the payroll, CXOs are being let go with just six months of salary compared to the earlier 12-16 months.

“There is a fear of social media backlash among many startups which could hamper future hiring prospects. Some of them have started paying a couple of months additional salaries to the exiting workforce and clearing the full and final payments as soon as possible,” said Kamal Karanth, co-founder of Xpheno, which tracks startup and tech hiring.

Since the beginning of the year, the startup sector has seen 17,000-20,000 layoffs, with edtech firms accounting for a majority of axed employees. Funding crunch, pressure on balance sheets, and unplanned hiring have led to large-scale layoffs.

“Many large companies are opting to continue medical insurance for employees who have been laid off till the end of the policy tenure. These insurance covers are part of group medical policies that companies offer the workforce,” said A.R. Ramesh, director, digital business solutions, professional staffing and international engagement, Adecco, a staffing firm.

In the last few weeks, many global firms have also let go of many employees and declared hiring freezes, signalling a looming recession in much of the developed West, which is impacting Indian staff.

Amazon has started a series of layoffs at its devices and services teams. The New York Times reported that the number of retrenched employees in corporate and tech roles may touch 10,000—the highest ever for the e-commerce behemoth since it was established.

Meta, the parent of social media platforms Facebook, WhatsApp and Instagram, has decided to cut its employee strength by 11,000, or 13% of its workforce. According to a New York Times report , Meta will offer a severance of 16 weeks of base pay plus two additional weeks for every year that the employee worked with the firm. Healthcare for the retrenched employees and their family members will be taken care of for an additional six months.

Twitter has also witnessed massive layoffs globally, and according to a Mint report, the social media platform now has fewer than 10 people in India.

However, the severance packages of senior executives have been shrinking. “In critical positions, the notice period now is just six months. Earlier, many CXOs would get compensation for one year of their service at the time of separation,” K. Sudarshan, managing partner, EMA Partners India, said.

In some cases, assurances are being provided that those retrenched will be on the first priority list to be hired back when the companies restart hiring. “Companies on compassionate grounds unofficially inform employees that they will be the first ones considered once business bounces back,” Rituparna Chakraborty, co-founder and executive director of TeamLease Services, said.

Catch all the Corporate news and Updates on Live Mint.
Download The Mint News App to get Daily Market Updates & Live Business News.



Source link