The country's largest biscuit maker, Parle might lay off up to 10,000 workers as a result of the current slowing economic growth and the company's falling demand in the rural heartland. A company executive on Wednesday said that the situation has forced the company to make the production cuts.
A slowdown in Asia's third-largest economy has adversely left a dent in the sales of everything ranging from cars to clothing. This has forced the companies to curtail production and left them with a hope that the government will unveil an economic stimulus to revive growth.
According to a senior official, the situation is so bad that if the government doesn't take necessary measures, they will have to eliminate the positions.
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Parle, founded in 1929, employs about 1,00,000 people, including direct and contract workers across 10 company-owned facilities and 125 contract manufacturing plants. The official blamed the government for the biscuit company's decline after it had rolled out the goods and services tax (GST) in 2017, which imposed a higher levy on biscuits costing as low as ₹5 a pack.
Accordingly, the company is forced to offer fewer biscuits in a packet which has resulted in a drastic drop in the demand of lower-income consumers from rural-India, which consist of more than half of Parle's revenue.
Meanwhile, Parle is not the only company to have been affected by the slowdown. Varun Berry, managing director of Britannia Industries Ltd, had said earlier this month that consumers were 'thinking twice' about buying products worth just ₹5.
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