Employment Insecurities in the Service Sector

The global scale of the economic impact of the pandemic has cut across sectors and industries, sparing none, leading to widespread lay-offs and retrenchments in the country. In the Indian context, the migrant labour and working poor employed in the informal sector were the first to bear the brunt of the lockdown in terms of jobs and income losses. But, the pandemic has worsened the already existing employment crisis in the country, wherein there were about 30 million unemployed persons as per the Periodic Labour Force Survey, 2017–18.

Amidst the lockdown, the contraction in the services sector that employs about 144.4 million people has also led to an unprecedented rise in cuts in salaries or instances of deferred payments, lay-offs, termination of contracts, retrenchments, and a freeze in hiring new employees. The Nikkei/IHS Markit Services Purchasing Managers’ Index, which plummeted from 49.3 in March 2020 to 5.4 in April, however, rose to 12.6 in May. But, this indicated a drastic contraction of the sector since the first survey 14 years ago. According to the Centre for Monitoring Indian Economy, the number of salaried employees reduced from 86 million in 2019–20 to 68 million in April 2020, while there was no reported increase in salaried jobs, with the number marginally declining from 68.4 million in April 2020 to 68.3 million in the month of May. This has caused considerable insecurity not just among the blue-collar workers but also white-collar workers and professionals, especially in sectors such as aviation, tourism, hospitality, e-commerce, media, retail, logistics, real estate, and information technology (IT) sectors.