Is your job safe - Career Information | Startup & Govt Career Info

SoftBank Crisis is about to take away funding from Indian startups and now due to coronavirus, many industries are facing economic slowdown which results in job cuts. So is your job safe?

SoftBank Financial Condition

As we have discussed in the SoftBank Crisis post, SoftBank has reported losses of about USD 8.9 billion in the last quarter and to recover from the losses SoftBank is selling its assets worth USD 41 billion. Also, we have seen, SoftBank's Vision Fund-1 which was about USD 100 billion has invested heavily in startups at high valuations out of which many startups are reporting huge losses which are not in millions but billions of dollars.

The money raised during various funding rounds by startups were used to expand heavily in the new markets internationally. Because of the current degraded financial condition of SoftBank, startups are unable to raise more funds for running operations. The latest example is of WeWork which is a SoftBank backed startup. After raising funds from SoftBank, WeWork expanded quickly in the international market. At the time of raising funds, WeWork reported valuation of USD 41 billion which turns down to USD 8 billion after WeWork launched its IPO.

Also, startups have registered huge losses not in the last quarter but in every quarter. 
  • Snapdeal registered a loss of 20%.
  • PayTM registered loss of 116%.
  • Ola registered a loss of 93%.
  • Delhivery registered a loss of 105%.
  • PolicyBazaar registered a loss of 65%.
  • FirstCry registered a loss of 82%.
  • Groffers registered a loss of 536%.

Corona Crisis

Because of the SoftBank Crisis, the economy is going down as the cashflow was moving slowly, then the Yes Bank fraud has also putten some burden on the economy and the economy was about to turn positive India has faced the pandemic of Corona Virus.

Due to coronavirus, India is locked down for 21 days from 23rd March 2020. This lockdown will impact negatively on the economy. The rest of the world is already paying a huge amount of loss in terms of money and lives. As of now, Italy has sacrificed more than 12 thousand lives, the USA having the highest number of corona positive cases, Spain, Germany, the UK, and other EU countries are facing huge problems due to coronavirus.

As an impact, it is estimated that about 4,00,00,000 jobs will be at risk in the USA. And it will also affect India hugely.

If we talk about India, a large number of workers, working in Aviation, Travel, Manufacturing, Construction are affected due to Corona Virus.

Aviation

  • Emirates has forced employees to take unpaid leaves.
  • GoAir has cut down the salary of employees by 50% for March.
  • Indigo also has cut down the salary of employees by 25% for March.
  • Many companies are reporting the worst financial results, which may lead the firms to file bankruptcy.

Hospitality

Hotels have fixed expenses like rent, salaries, etc. And their income has come down to 0. And to survive they have to make some decisions like layoffs.
  • Holiday Inn started layoff to survive in the long run.
  • Event Management, Textile, Entertainment industry have a worse impact due to Corona Virus.

Manufacturing / Automobile

  • Manufacturing is an industry that can not offer work from home.
  • The automobile industry is facing slowdown since 2019. Due to the Corona Virus, many companies will not survive and we may see them filing for bankruptcy.
  • The recession is about to come which will decrease the power of spending of people which in return result in less demand for goods/ luxury items.

Travel

  • Due to the coronavirus, operations of the travel industry are closed.
  • MakeMyTrip, Goibibo, redBus management are taking salary cuts.
  • MakeMyTrip has laid off 250 mid & low-level employees.
  • TravelTriangle has laid off 150 employees.
This is just the starting of laying off. If the lockdown has increased further many more layoffs will happen.

The larger companies like Tata, Visa, Citi, FedEx, etc are not going to layoff until it is impossible to stay operational during this pandemic recession. But there are many small companies which are depending highly on revenue. So if their revenues are declining it will be impossible for them to pay the salaries of employees.

The unemployment rate in India is currently at 7.78%, and due to the coronavirus pandemic, it may go up to 9%-10%.

The industries which have taken their operations online will have a low layoff and will survive during this pandemic as well. The IT sector will also see a low layoff as during this pandemic the employees are working from home and operations are smooth.

So if your business is not online yet, try to take your operations online. We will be writing a detailed post on this as well. Subscribe to our newsletter to get alert of new posts.