Topsy Turvy World

No one asked for a turnaround but it's certainly happened. An ugly one.

Hygiene Check
Currently about 190mn people are unemployed across the world. The ILO estimates this morbid figure to deepen to a figure of 210mn for 2009. If you thought the USA story sucked at 6% unemployement, consider this : India has been stuck at 9-11% unemployment for the past 5 years.(A thunderous applause for the heroes we have in the Govt) India has a 500mn strong workforce. Each year, it grows at a pace of 2.5%. That makes it 50mn jobs in 5 years. At the current rate, job creation was running at 2.3%. This was in January 2008. Now, with the turmoil, we can expect about 1.5%. Which means that by 2013, we'll be hosting 56mn unemployed souls in this nation. And the nagging problem is that while jobs are being cut, new jobs are'nt added at a faster pace to make up for it. Darn.


K.PandiaRajan,MD of MaFoi and Randstad India, lets out a stinker. Of the 9mn youth that set themselves up for the job market in 2009, only 17% will land up with one. If these bright minds are expected to get going in such a dreary expanse, it can only spell doom. Some of them have foreseen it and are taking necessary action. The IIM summer placement efforts have been manyfold towards the long term. At least a 30-40% increase in company visits have given a larger scope to work with for the final placement next year. 2008 saw about 9.5 lakh jobs created for people. Along those lines, projections hit 9.75 lakh for 2009. Not anymore. At best, we can expect 6.67 lakh jobs.

Sector breakups?

The most sought after candy in the bag, IT, is looking weak. Most of the biggies have about 2/3rds of their business coming from US and the EU. Bad news. Job hiring numbers will be cut by 82% for 2009. 10,000 layoffs have already taken place. That's why the need to rope in domestic clients. Much more than before. Som Mittal has declared $40bn as a tough target for this year. Don't even try for that $60bn (2010 estimate) right now.

Retail (78% job hiring slash), logistics (78%), real estate (78%) , automobiles (51%), hospitality (51%) and textiles (50%) are going to be badly hit too. If you talk about absolutes, the textile sector has lost 700,000 jobs already.

Few sectors that will weather this storm are pharma, education and existing players in telecom. This doesnt mean that these sectors will do well;just that the hit that they take will be bearable.

The paranoia that seeps in my mind is when I read about establishments like the National Employment Service, which has about a 1000 setups across the nation. Sadly, it provides our country with only about 100,000 jobs annually. If only we paid heed to such job creators...the situation would be less troublesome.

With all that, we're hearing a slowdown in the economy, a dip from the coveted 9%+ to a glum 6.3-6.9%. But hold on - someone's on the telly. Ok, well, NDTV had the President of Yale University comment on India's projected dip thanks to this recession. He shrugged a bit here and there and scrambled for the right words. Finally came down to "it's fine.. its quite alright even if they did 4% for the next two years".

All this chaos reminds me of the placement season at the institute. Those days were gloomy and burdened. This recession has resulted in B-school applications shooting up by 77% : big surge. But the real character test lies for the ones that are about to embrace this tight situation.

And don't you dare think about China in comparison. They've done something already. A $585 bn stimulus package to energise any element that falls prey to this downturn. Abolishing loan quotas on banks, revamping VAT and slashing interest rates.