Blackberrys (Mohan Clothing Company), one of the leading Indian formalwear brands, has axed its 120 employees.
Notably, most of them are from mid-level management across different departments. The owner of the company confirmed this to Apparel Resources. The company has 270 Exclusive Brand Outlets (EBOs) across India, which will close some stores in the coming days.
After the lockdown, owing to coronavirus, this is first ever layoff announced by any major Indian apparel brand.
Adhering to the terms of employment, all relieved employees will receive complete dues. In addition to extending the health insurance to its employees until October 2020, the company also claims to set up an emergency fund where the company and fellow employees will contribute for employees who need help.
Talking to Apparel Resources, Nikhil Mohan, MD of the company, said “All these are our talented colleagues. This is extremely painful for us and we don’t wish to do that. As business is shrinking, we are forced to take this decision. There is no option left for us.”
He added that whatever term we have with them, will follow for sure. We do also have platforms to help them in the next phase of their career.”
Will there be more job losses in the company? On this question, he said, “The answer is no, as of now, but it all depends on future. We made a humble beginning from Kotla Mubarakpur (a small place in Delhi) 30 years ago and always added staff; this is the first time ever we had to take such a step.”
As far as store closing is concerned, he told that company is in touch with the landlord and discussing the same. There will be definitely some store closures in next few weeks. “We can open stores anytime, but as of now our priority is our team,” he said.
But social media, particularly WhatsApp, sometimes presents a different story.
Apparel Resources does have an audio recording, wherein a senior officer of the company has been asking employees to resign and get 2 months’ salary, health insurance, etc. In the recording (which is not confirmed), the officer is also heard telling the employees that they will be bereft of all facilities and will be terminated immediately, if they don’t resign.
Nikhil, however, refused to comment on the same.
Just a few days back, in a webinar, top management of the company had also hinted to cut some unprofitable product categories from its offering.
One of the employees of the company who lost his job told, on the request of anonymity, “The company has been making profits continuously for 25 years, yet there was a reduction of 10-20 per cent in the last salary. More salary cut was also an option rather than terminating us.”
Harminder Sahni, Founder and MD, Wazir Advisors, a leading consultancy firm, is of the view that it is not right to expect that companies should use their reserve funds at this time. They have to remain competitive in the market so if there is no work, they have to do a layoff. “If there is no work, why will one pay even half of your salary? Therefore, the professionals who have lost their jobs should be practical and ready to work irrespective of whatever salary they are getting.”
“As part of company’s first restructuring in 29 years, we decided to start with closing operations in unprofitable markets and consequently downsizing our workforce for optimum efficiency. While we were still in the process of taking the final steps towards restructuring and consolidating our operations, the outburst of coronavirus hit us. Within a few weeks our company operations, sales and revenue went to a complete standstill. Despite this, we were able to pay salaries for March, April and May,” the company said in a statement.
It further adds that to ensure long-term continuity of our re-structured operations, we had to take the decision of downsizing our employee base by 120 and manage related costs across levels.
