Layoffs are not the solution and companies have a responsibility towards their employees, said Ratan Tata, the Chairman of Tata Trusts. Layoffs have been a common occurrence across multiple industries due to the COVID-19 pandemic, and this tendency was a knee-jerk reaction, he added. The Tata Group has had top-level pay cuts, but no layoffs.
In an interview, the octogenarian doyen said that companies have to accept and change what they consider is fair and necessary in order to survive.
“One cannot continue to do business in certain ways and one won't survive if you are not sensitive towards all your stakeholders. Laying-off people will not solve your problems as you have a responsibility towards those employees,” Tata said.
The initial reaction of laying off thousands is not the solution, he said. “I don’t think it is [going to solve the problem of companies], that’s the knee-jerk reaction that you had from the traditional workplace, lay off people because the business is gone,” he said.
It is at a time of crisis and distinct difficulties that “some of the most interesting or tremendous solutions have been found”. “We as human beings start to look for solutions; we tend to be more innovative and creative to find solutions at such times,” said Tata.
He also spoke about the crisis of migrant workers, who began walking home as India went into lockdown in March, with just a four-hour notice.
“That labour force which was huge, one day was just told, ‘there is no work for you, we don’t have a way of finding means for sending you home’. You are just there, you don’t have food to eat, you don’t have a place to stay. Not wishing to blame anybody but that was the traditional view, that view has changed now to ‘who are you to do that?” he asked.
Furthermore, speaking to business owners, he said that labourers are the people who have served them all their careers.
“These are the people that have worked for you, these are the people who have served you all their careers so you send them out to live in the rain? Is that your definition of ethics when you treat your labour force that way?” he said.
If another crisis such as this were to hit, businesses would be in a better position to tackle it, he said.
“I hope we never have another case, but if we did have another case of this type, I think you’d have a much better understanding of what people could do, companies would be reacting much faster -- the right way, rather than just letting people go,” he said.
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