Parle may cut up to 10,000 jobs, slash production as slowdown bites

Current Affairs

Parle Products Pvt Ltd, a leading Indian biscuit maker, might lay off up to 10,000 workers as slowing economic growth and falling demand in the rural heartland could cause production cuts, a company executive said on Wednesday.
A downturn in Asia's third-largest economy is denting sales of everything from cars to clothing, forcing companies to curtail production and raising hopes that the India government will unveil an economic stimulus to revive growth.
A sharp drop in Parle's biscuit sales means the company may have to slash production, which may result in layoffs of 8,000-10,000 people, Mayank Shah, category head at Parle, said in a telephone interview from Mumbai.
"The situation is so bad, that if the government doesn't intervene immediately ... we may be forced to eliminate these positions," he said.
Parle, founded in 1929, employs about 100,000 people, including direct and contract workers across 10 company-owned facilities and 125 contract manufacturing plants.
Shah said demand for popular Parle biscuit brands such as Parle-G had been worsening since India rolled out a nationwide goods and services tax (GST) in 2017, which imposed a higher levy on biscuits costing as low as Rs 5, or 7 cents a pack.The higher taxes have forced Parle to offer fewer biscuits in each pack, hitting demand from lower-income consumers in rural India, which contributes more than half of Parle's revenue and where two-thirds of Indians live.

"Consumers here are extremely price-sensitive. They're extremely conscious of how many biscuits they are getting for a particular price," Shah said...Read More