Parle denies reports of laying off 10,000 workers due to economic slowdown
New Delhi | Jagran News Desk: Leading biscuit maker Parle has denied reports of cutting 10,000 workers due to slow economic growth, lower demand and production cuts. "The news about 8,000 to 10,000 job losses at Parle G is not a factual story," said Mayank Shah, Senior Category Head at Parle.
"The facts have been hyped by the media. The condition of job loss is actually an eventuality if our demand for lesser tax rates is not met," he said.
"It is not a fact that people have lost their jobs by now. The fact is that we cannot continue with the same number of manpower if we are not having the same production volume as earlier," said Shah.
Earlier, it was reported that Parle Products Pvt Ltd., might lay off up to 10,000 workers, which can be considered as the side-effect of slow economic growth and falling demand in the rural areas could cause production cuts, a company executive told Reuters on Wednesday.
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.
Mayank Shah, Senior Category Head, said that demand for popular Parle biscuit brands such as Parle-G had been worsening since the government rolled out a nationwide goods and services tax (GST) in 2017, which imposed a higher levy on biscuits costing as low as Rs. 5 a pack.
"Consumers here are extremely price-sensitive. They're extremely conscious of how many biscuits they are getting for a particular price," Shah said.
The higher taxes have forced Parle to offer fewer biscuits in each pack, hitting demand from lower-income consumers in rural India, which contributes more than half of Parle's revenue.
Parle, which has an annual revenue of above $1.4 billion, held talks over the past year with the government's GST Council as well as former Finance Minister Arun Jaitley, asking them to review tax rates, Shah added.
Once known as Parle Gluco, the Mumbai-headquartered company's flagship biscuit brand was renamed as Parle-G, and became a household name in the country through the 1980s and 1990s. In 2003, Parle-G was considered the world's largest selling biscuit brand.
The slowdown in India's economic growth, which has already led to thousands of job losses in its crucial automotive industry, was accelerating the drop in demand, Shah said.
Parle is not the only food product company to have flagged slowing demand.
Varun Berry, managing director of Britannia Industries Ltd, Parle's main competitor, said earlier this month that consumers were "thinking twice" about buying products worth just Rs. 5.
"Obviously, there is some serious issue in the economy," Berry had said on a conference call with analysts.
Posted By: Talib Khan