Dalal Street may pink-slip 20,000

B D Narayankar

AFTER AVIATION industry, it’s the turn of the broking firms to resort to job cuts. It is reported that as many as 20,000 staffers will be shown the door soon after Diwali. Top brokerage houses are unable to fend off the challenges posed by global depression as most of the Indian bourses’ charts are bathed in red.

Angel Broking, it is reported, has already shortlisted 500 employees and is on the verge of asking them to pack off. The company is planning to serve a month’s notice on the to-be-retrenched employees. The retrenchment will begin at the branch level, mainly at the mid and lower management levels. "Performance of the staffers is the main criterion to be considered," said an officer of Angel Broking, which has the most number of retail outlets in India.

Motilal Oswal Financial Services Limited is also planning to cut jobs. Highly reliable sources at the company accepted the scenario by saying, “Yes, we have ’non-performers’ on their way out, but they are very few in number".

After January, things have been getting tough for brokerage firms. Their income levels have been on the downslide with share orders and transactions remaining dismal at many branches. Sources revealed that almost all the brokerage houses have seen their business plummeting to 30-40 per cent. Salaries grew by 4-6 times in the last two years alone.

But with sales volume at a third of what was witnessed during the peak, revenue flow has now thinned. In this scenario, many broking firms have decided to cut employee salaries, Sharekhan being the first one to do so.

Most employees working in the sector have been preparing themselves for this scenario right from the day they realised that there would be no Diwali bonus. “Forget the bonus, we don’t even know what will happen to our jobs," said one, pointing out that layoffs had started a couple of months ago, with HSBC removing virtually the entire analysis team at IL&FS after taking over the firm.

When contacted, a spokesperson at Angel Broking denied any retrenchment plans but accepted that they had halted all recruitment. “Lower level people got the bonus as it is not a big amount. Bonus at middle and higher levels is performance-linked and our half-yearly appraisals will come only in January. Considering the pres­ent scenario, we can hardly expect anything," the spokesperson said.

Source: Meri News