Retail chain Shoppers Stop laid off 1,100 employees last week, the latest in a long list of companies that have let go of workers. The retailer which sells clothing, accessories, handbags, shoes, jewellery, fragrances, cosmetics, beauty products and more said that the retail industry is going through its worst phase.
According to the Economic Times, this is 15% of the nearly 7,500 people the chain employs, comprising mostly junior and mid-level workers who have been asked to resign. The report, quoting an official, added that this includes 160 people involved in back-end operations and 1,000 front end store employees.
The report added that employee costs make up 15% of the Shoppers Stop annual sales, and has opened 55 of 90 of its stores since the lockdown was lifted.
In a statement, Shoppers Stop said that it has been exploring combinations of cost reduction measures â€śto ensure that the least number of people are impacted due to these unforeseen circumstances, and also keep in mind that business continuity is maintained.â€ť
The statement added that the retail industry has a high attrition rate of 36-50% and a large migrant workforce â€śsome of whom work with us on a contractual and temporary basis and some, who are likely to not return during the pandemic.â€ť
It stated that it will be looking at closing down lower performing and unsustainable stores, and that layoffs were inevitable.
â€śWith a limitation on adding new stores in this situation, the size of our business is effectively reduced and unfortunately we, therefore, need to adjust our cost base in such times,â€ť it stated.
Employees will receive two-months salary, and Shoppers Stop has said that it looks at rehiring from the same set of people when things improve.
This comes just as the country begins lifting the two-month lockdown, and retailers have been allowed to open stores.