Ashok Jain, erstwhile ceo of Cadbury Schweppes India, is also coming to grips with the new reality. One December night, the bedside phone rang. It was his boss calling from London. The company, he told Jain, was selling its soft drinks brands outside the US to Coca-Cola. The size of the business was too small to carry along. Even as the caller hung up, Jain wondered if he had heard right. He lay awake tossing and turning all night. The early morning papers, however, only confirmed the worst. Jain has since been trying to roll with the blow by holding workshops for Schweppes employees in Mumbai where they are being trained in how to seek opportunity in the crisis of joblessness.
After working for 11 years in the liquor industry, when iit-iim alumnus Rajesh Srivastava got a break as vice-president of dcw Home Products, he grabbed it as an opportunity to build brands from scratch. In the thumping success of the Captain Cook brand, he saw personal recognition. But victory proved shortlived. One evening, a phone call from a journalist friend informed him that his company was being sold. Not that Srivastava had had no inkling. In office, colleagues had been cranking out resumes without even bothering to hide it from others. But nothing prepared him for the emotional dislocation of the family and people around him. 'How will I play with my friends if we change our house?' asked seven-year-old son Kautuk. 'Is it true that saab's company no longer exists?' inquired driver Raju, worried that the axe would now fall on his own job. Even the maidservant was curious. 'How come saab is home for lunch?' 'Is everything alright?' was the unspoken implication.
Srivastava coped. He is back in the liquor industry, albeit at a lower designation, as assistant vice-president, Shaw Wallace. But the experience has changed his whole outlook on life. 'No more impulse purchases for me. Earlier I would deposit money in ppf once a year, on March 31, that too grudgingly. Now I do it every month. I am consciously trying to separate my family's lifestyle from my company's fortunes. For myself, I am building a professional identity, independent of the company where I work.' Srivastava is writing columns for magazines, conducting training programmes in other companies and teaching at B-schools. 'You never know when they may be potential alternate careers,' he quips.
Khanna, Jain and Srivastava are just three of hundreds of professionals-some the best and brightest in their field-being swept away in the gales blowing from overseas.There are no boundaries or walls anymore to act as a buffer against the global tempest. 'It's like time and distance have collapsed. Sure, the world has been getting smaller and faster since the invention of the railroad and telegraph. But now the last barriers are crumbling,' says Noni Chawla, head of executive search firm Korn/Ferry International. And being competent, strangely enough, is no longer any guarantee that your job is safe. A global strategic decision made in Paris or Pittsburgh can take your job away; at that level, you are no more than a speck of dust.
A case in point is the recent merger of Nations Bank and Bank of America that took a toll on the lives of hundreds of white-collar managers in cities as far flung as New Delhi, Taipei and Singapore. Hugh McColl, ceo of the new $60 billion BankAmerica Corporation, wants to preside over the world's largest banking entity. Sitting in his North Carolina headquarters, he has decided that any business anywhere in the world that was not No. 1 or had no chance in the foreseeable future to be No. 1 would be axed.
Within weeks of the decision, Arun Duggal, the bank's cmd in India, and Anuroop 'Tony' Singh, head of retail business, were addressing a series of meetings in different cities, telling some 350-odd people that the bank's retail business was up for sale. Managers were bewildered. Only about three years ago, the bank separated its wholesale and retail businesses to concentrate on the latter. Retail business was growing at a healthy 30 per cent a year and annual profit stood at Rs 40 crore. The bank had built a sizeable retail asset base being valued at around Rs 700 crore by potential buyers in addition to a strong brand equity riding on pioneering concepts like 10 am to 7 pm banking every day of the year. Yet down came the axe. 'We thought we were on the way to glory, not on the way out of the door,' says one manager. Singh, the man behind the spectacular success, puts up a brave front. 'The time to sell is when business is booming, not going downhill,' he says. Not many of his managers share his views. To soften the blow, a healthy severance package has been offered but the sheen is wearing thin. 'No matter what's happening, you have to draw cash every month, pay your bills and tell your children where you intend going from here,' says a manager.
At anz Grindlays, the story is no different. The bank has been going through a painful restructuring process in which senior people were asked to resign and re-apply for their jobs. There's a purge on throughout the bank. 'Nobody knows what's happening. There's too much of angst, despair and resentment. People are drifting ghost-like, talking in whispers and trading information in the corners for you don't know where you are heading. Not even my boss, behind that closed door,' says a manager at the Chennai branch. The man steering the ship is chief executive John MacLane and his crack team sitting in Melbourne.
As distances collapse, the man controlling your fate at the workplace is no longer the boss who evaluates your performance and pay packet and sits in that glass cabin across the corridor. He is invariably some unseen, unheard and unspoken-to person sitting thousands of miles away who looks at you in pure statistical terms. When Citigroup decides to cut 10,400 jobs in a global recast, a Citibank spokesperson in Mumbai goes on record to say that from time to time, the bank would increase or decrease the business as per market situations in the medium-term. The message: fortunes of 1,600 employees in India are to be dictated by the market. Nearly all other major banks, be it hsbc, Standard Chartered or Societe Generale, are eliminating people as the Asian crisis draws the attention of the global management to the businesses in these countries.'All those foreign bankers who believed that they were masterminding the future have landed on terra firma with a thud,' says P. Suresh, managing director, abc Search at Mumbai.
In the global economy, capital moves in a matter of keystrokes, leaving behind a human toll. Last week, Lehman Brothers decided to exit India citing the downturn in Asia and poor business emanating from India as the reasons. Credit Lyonnais is also to shut its investment bank in the country. The trend began exactly a year ago when foreign institutional investors like Deutsche Morgan Grenfell, bzw, NatWest Markets, Peregrine Holdings, HG Asia and W.I. Carr crashed in the Bombay backyard just as hard as they fell in Malaysia and South Korea. 'Emerging markets today are no longer the glamorous destination everyone was seeking. It's gone out of fashion,' says Atul Sud, managing director, Strategic Capital. With it has gone sexy, high-profile financial market jobs. Coming up now is the merger of GE Transportation Finance and Countrywide Consumer Finance. And like all mergers, this too shall see serious job slashing. The financial services business this year will be awash with too many people chasing too few jobs.
Global managerial concepts, practices and ideas are seeping in at amazing speed via everything from websites to business shows on television to e-mail. 'Management mantras of the west are almost being copied blindly by Indian corporates,' says Suresh of abc. Some of the ones that have retrenchments as their direct effect are:
Big is beautiful: If 1998 was the year of gigantic, crossborder mergers in sectors as wide as oil, cars and banks in the world arena, companies in India were not far behind in emulating the trend. Whether in core sectors like cement or support services like advertising, the big sharks straddled the sector swallowing small fish. In cement, Larsen & Toubro bought over Narmada Cements, Grasim acquired a stake in Digvijaya and Dharani Cements and French major Lafarge is buying Tata Steel's cement division. In the advertising world, Fountainhead merged with Anthem tbwa, Press Syndicate with McCann Erickson, Pratibha with ssc&b Lintas, Everest with Rediffussion dy&r and Speer Communications with Ogilvy & Mather. With the top 10 agencies garnering more than 40 per cent of the business, smaller agencies had no option but to merge or close down. 'Everyone is trying to be bigger fish in an evaporating pond. In the bargain, scores of people are being thrown out of smaller outfits. I have never before seen so many people looking for work before,' remarks Abhijit Basu, general manager at Anthem.
Cost-cutting is religion: Lean and mean is the business credo of the '90s. Operational efficiency is under the scanner at some of the biggest names in India Inc like the Tatas, the AV Birla group, bilt, Apollo Tyres, as well as old multinationals like Siemens, Philips, Indal and Crompton Greaves. Old-style companies outmanoeuvred by nimble firms are thinking that going on a diet will help. Tisco is cutting 5,000 jobs as part of the cost-cutting moves to cope with dwindling margins. Over the last 18 months, Siemens has shed 2,000 employees. Philips rid itself of 1,500 staffers. Binny plans to whittle its executive cadre from around 210 personnel to a mere 35 to cope with mounting losses. nocil is involved in a massive clean-up operation affecting 500 managers as it clears the decks for a takeover by Shell. 'The days of nibbling away at deadwood are gone. The poor-performing, end-of-career oldtimers are being asked to go because they are uncomfortable with the new environment and the new skill sets required by changing technology,' says Jay Desai, managing partner, Universal Consulting.'A guy over 50 is a liability today,' adds Suresh.
Pin the laggards: Time was if you wore a blue suit, went where the company sent you and did what it asked, you would be taken care of for life. Time is if you don't meet your targets, perform every quarter as per the company's goal, you'll be shown the door. Three months after being summoned to Hong Kong and told to improve Star TV's performance in India, four top managers-executive director Bimla Bhalla, vice-presidents Nazish Hussaini and Basava Raj, and head of corporate affairs B. Guha-were sacked. The reason: heavy spending on programming had not translated into a proportional increase in viewership. Heads had to roll. ''Target orientation' and 'performance pay' are two buzzwords to turn the heat on staff who have outlived their utility,' says an hrd consultant.
Pry on rivals: Companies are now looking over their shoulders to see what rivals are doing to keep ahead in the competitive environment. In business lexicon, it's called benchmarking. So if pharma companies like Pfizer, Novartis and Roche Products trim people to cut costs, can Merind be far behind? At its Bhandup unit, new owner Wockhardt has slashed the workforce by 50 per cent and is now planning to pare more than half of the 160 executives. Hoechst has been chopping away staff gradually at its Mulund plant.
Cut the clutter: Time was when most companies had structures like the typical one in which one person made the sale, another took the measurement and the third fitted the window pane. Now companies are outsourcing. Vertical integration is out, deconstruction is in. In the old world order, companies like Telco did everything on their own. Now the automaker is planning to outsource various components like axles, crankshafts and the like. The upside: better return on capital employed, larger cash surplus available to utilise in the core business. The downside: human cost.
And that cost is not just monetary. 'When you take away jobs from people, you take away some sense of self, some peace of mind, some standing in the eyes of family members,' says Anil Sachdeva, managing director, Eicher Consultancy. That's what people find the most difficult to handle. Take Chennai-based Krishnamurthy and Kavita. Both lost their jobs early
last year at a teak plantation and advertising agency respectively. They had bought a flat in 1994 at the peak of the economic boom, leased a car and put their savings into the stockmarket. Today they are sinking with the crumbling value of their investments. 'We have been defaulting on our housing loan for the last seven months. We cannot sell the flat as the loan value is more than the price it will fetch in the market. The value of my shares has eroded by 80 per cent. I keep telling the finance company to take back the car; they won't. They expect my finances to improve,' rues Krishnamurthy. Last heard, he had found a job in a TV software company. But what of his bruised ego? 'I've failed in my duty to provide basic comforts and good schooling to my kids whom I have shifted to a government-aided school. Trouble is that I am starting new with the burden of being old,' he says. In the coming months, India will see thousands of Krishnamurthys.
Asked when the current spate of downsizing will end, Ravi Virmani, ceo of headhunters Noble & Hewitt replies: 'Never. Not till inefficiencies end.' That, unfortunately, is the flip side of globalisation.
