10 Cr+ jobs at risk after the COVID-19 lockdown

Blog article: Jobs post COVID19

The corona virus pandemic has adversely impacted the global economy and the job [1] market. Almost all major economic activities globally are on pause, pushing some countries and the company’s current accounts in the red zone. A severe slowdown in economic growth [2] is expected due to production and logistics lockdown despite strong consumption demand.

And there is no easy exit insight [3]. The crisis is in its early days and it is hard to predict what’s ahead. Nevertheless, it is certain that this event will have long-lasting, game-changing ramifications on the economy and the job market.

While majority sectors, companies, and workers are going to be adversely affected, there is a silver lining for a few, who may benefit from this near-tragedy. Let’s take a look at the sectors that are expected to benefit and lose due to this global pandemic.

Industries getting adversely impacted –

  • Travel and Tourism:
    The travel & tourism industry is severely affected by the coronavirus outbreak. People are avoiding travel [4] to different countries and cities, which has negatively impacted the travel business. It is estimated that the Indian aviation sector [5] may be staring at around $1.5 billion-$2 billion of losses, given the current lockdown parameters. It is estimated that the industry will face an overall loss [6] of Rs 5 lakh crore and job cuts for 4-5 crore people [7].
  • Leisure and hospitality:
    Malls, shopping centers [8], hotels [9], and most restaurants are temporarily shut down during the lockdown.  Lower footfalls and occupancies, a decline in business volume, and sub-optimal operating efficiencies are adversely impacting the cash flows of companies in these commercial real estates [10] sectors. The hospitality industry estimates 3.5-4 crore job losses [11] if immediate support is not provided.
  • Oil/Petroleum Industry:
    Global travel bans along with grounding of international flights have led to a heavy reduction in the consumption of crude oil [12]. A fall in the earnings [13] is expected for oil & gas sector players.

Industries getting moderately affected-

  • Retail:
    Sales of FMCG companies went up due to an increase in demand by panicked consumers, but this may be neutralized by a drop in levels in stock-in-trade’. Due to potential supply chain disruptions, the retail sector is facing challenges due to COVID-19 and may see a dip in growth [14]. Retailers may lay off 80,000 [15] employees due to losses suffered in the lockdown.
  • Manufacturing:
    The COVID-19 pandemic restrictions have sharply contracted [16] activity across most manufacturing industries including automotive, textile, and industrial machinery. However, India is well-positioned to step in as an alternative global manufacturing hub for the world, with normalcy returning [17] to the sector in the long run. The pandemic is however expected to disrupt the job market [18] in the financial sector.
  • Financial services:
    Muted Economic growth, dismal manufacturing activity, and low Capex demand have led to subdued credit growth for banking activity in India [19] and a possible spike in the NPAs [20]. Smaller banks are expected to be critically affected [21] compared to large national banks despite support from the RBI. However, brooking agencies are gaining from the lockdown situation with people investing and saving money ahead of the crisis.

Industries remaining unaffected or benefiting-

  • Internet companies that don’t rely upon brick-and-mortar locations:
    With people staying indoors, the demand for online learning, fitness, social media, and digital consumption [22] has increased exponentially across the world. Social Media Activity has increased [23] and there is a massive change in the consumption of different digital spaces. There is the rapid adoption of online services like Telemedicine [24], Remote working, Online Delivery, etc. Several of these services are ramping up hiring [25] to meet the current demand.
  • Tech Services companies:
    Coronavirus has a mixed impact on tech companies. With work-in-isolation policy being a mandate for employees, there are companies that make the most of it in terms of profit. However, COVID-19 has created an immediate need for technologies like AI, ML, and analytics in Supply Chain Management [26].  Many companies are still hiring AI Engineers [27] to meet post-crisis demand. The lockdown will have an adverse impact [28] on the IT job market in India. However several Multinational corporations have advertised over 200,000 [29] jobs in the past four weeks.
  • Video Game Companies:
    With most of the schools, colleges and offices closed and most of the people stuck at home, are turning to online video games [30] to keep themselves entertained.  It’s also a way to interact with friends and family to maintain social relations, while also practicing self-distancing. Gaming companies are following guidelines provided by The World Health Organization [31] in an attempt to highlight the potential of social distancing by playing video games indoors.

Experts predict a fundamental and structural change in the job market [32] with the CMIE’s estimates on unemployment shot up [33] from 8.4% in mid-March to the current 23%. However, there is some respite with a few jobs that are in demand [34] in the current situation.

The Indian government has announced a second extension to the ongoing nationwide Covid-19 lockdown [35] which will now extend to May 18. This will further amplify the problems faced by the economy.

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