Author: Jerome Anthony

COVID-19: Salary hikes may be affected; hiring slows across IT companies and startups

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As startups and IT companies take stock of the business impact from the coronavirus pandemic, industry members say companies are taking some tough calls on hirings and bonuses.

According to a LocalCirlces survey, 71% startups and SMEs feel they are now facing lower demand for their products or services. The survey shows that this trend could lead to tough cost-cutting measures at these companies.

Around 63% of startups and SMEs surveyed said that they would cut spending by lowering employee costs, discretionary expenses, and exiting non-essential supplier projects. Almost 17% said they will freeze incentives and benefits for a year and another 17% said they would reduce headcount based on performance.

Hiring across several companies has been put on hold, and budgets for CXO hires have been halved, according to multiple talent and recruitment consultancy firms.

Kamal Karanth, cofounder of XPheno that works with GICs and IT services companies for recruitment, said that at least 50 percent of full-time hirings across their clients have seen a freeze in the Rs 15 lakh to Rs 50 lakh salary range.

Bonuses and salary hikes have also been put on hold in the IT sector, industry sources said.

“Right now, we have only one priority of employee safety and well-being. All salary-related discussions are on hold,” said CP Gurnani, CEO of Tech Mahindra.

Transearch India, a search organisation that works on placements of CXOs and VPs across consumer internet startups, said that budgets have been halved for these positions and there’s a freeze on 20 to 30 percent existing mandates with the company.

“Since more than a week, we have not had any new requests and even in existing mandates, about 20-30% have been frozen and we expect this to go up in the coming weeks,” said Ashish Sanganeria, partner for digital practice at TranSearch India.

“We have seen salary offers for CTO and other CXO levels in some startups being slashed by half,” he added.

However, HR tech companies such as Spottabl, a recruitment tech platform for startups, said that there has been no ‘freeze’ on hirings at startups. In fact some sectors have witnessed a spike in hiring for high-impact roles.

“High-impact roles such as tech/product, business finance and digital are seeing a spike in hiring demand, especially in sectors such as health tech and pharma, B2B and SaaS,” said Vani Shri, CEO, Spottabl. The platform helps startups find talent across candidates with two to three years of experience till the C-Suite level.

“Only roles such as branding, marketing and growth, which need big funds around those functions, are being relooked at,” she added.

A Nasscom executive said it was too early to report any impact on hiring and on bonuses or salary hikes.

“The appraisal cycle in the IT sector happens in the May-June period, so there is still some time for that. But it will be a tough year for the sector given that new projects and new deals will be on hold,” the person said, requesting anonymity.

IT sector analysts have estimated that the sector will see an impact on revenue for the March quarter and the first quarter of the next fiscal.

Kotak Institutional Equities last week said in its report that they were cutting revenue growth estimates for the large and mid-tech IT companies by 2-4 percent and revised growth forecast for the whole sector to 3-8 percent for FY21.

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COVID-19: Social distancing derails India’s shared workspace market

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The last couple of weeks — since the number of coronavirus infections started rising in India — have seen added emphasis being laid on social distancing, which some suggest should be adopted as a lifestyle to combat COVID-19. As a result, a number of companies have asked staff to work from home. This has, not surprisingly, impacted India’s fledgling co-working space.

Occupancy rates and footfalls at these premises has taken a drastic hit, both of which have seen a decline according to co-working space companies. “There is an impact of about 10 percent currently, in the whole set-up since people are restricting themselves from coming into work,” said Gurbinder Rattha, Founder and Managing Director at Chennai-based co-working space firm, Workafella.

Not all shared workspace companies are reporting a marginal decline. “Approximately, 32 percent of our members are choosing to work from home. However, we are taking all precautions to ensure that all workers opting to work at our offices, are safeguarded and follow appropriate safety procedures,” said Ashish Goenka, Director at Redbrick Offices.

It’s the same story at larger companies. WeWork has conceded that there has been a drop in footfall — the company did not divulge by how much — but said that business hasn’t been gravely affected, yet. “Since a lot of member companies have given their employees the option of working from home, we have experienced a drop in footfall at our spaces,” said a WeWork spokesperson.

Apart of occupancy levels and footfalls declining, the bigger worry is that the shared workspace market may not be able to sustain itself in the medium-term should the COVID-19 outbreak and the emphasis on social distancing continue. An indication of this is that business enquiries have also suffered at most shared workspace companies, according to aggregator, Flexispaces.com.

“We are observing a 40 percent drop in the footfalls of new inquiries,” said Sandeep Prasad, Founder, Flexispaces.com, “If the situation remains the same or even gets worse, co-working may be one of the most affected industries due to this, and the drop may go up to 70 percent.”

However, shared workspace brand CoWrks said that while smaller companies are logging out of shared workspaces, larger enterprises are seeking smaller cubicles to ensure synergized business continuity.

Heightened precaution continues to prevail. When CNBC-TV18 requested CoWrks to visit one of its shared workspaces in Chennai to get a visual perspective of how COVID-19 had impacted occupancy levels at these offices, we were told of a strict no-visitors-allowed policy being implemented for the time-being. This was understandable given that social distancing is crucial at the moment.

“While we’ve opened up our spaces for people — to make it an extended work-from-home or a temporary workspace, what we’ve done as an added precaution is we have completely cancelled all events and community space utilization,” said Abhishek Goenka, CEO, CoWrks.

This means that almost all shared workspace majors are taking mandated precautions — like temperature-screening of members, frequent swabbing with disinfectant, a blanket ban on visitors, and instituting every measure the government has laid down.

“We are keeping a check on this (government regulations), and making sure that we are there to protect our customers and our teams in this environment,” said Harsh Lambah, Country Manager (India), IWG, “If the government introduces new regulations, we will be adapting to that,” he added.

Luckily for co-working space companies, the Indian government has stopped short of imposing an outright ban on shared work environments, but has issued several advisories on working from home, with Prime Minister Narendra Modi calling companies to let employees work from home whenever necessary. Nonetheless, it’s a matter of time that we’ll know how this cultural shift will impact companies in the business of letting out work stations.

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PM Narendra Modi on battling coronavirus: 10 key takeaways

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Prime Minister Narendra Modi in a televised address on March 19 asked citizens to observe “Janata Curfew” or public curfew by remaining indoors as much as possible for the next two weeks. He stressed that most countries are finding it difficult to battle the coronavirus pandemic, but we will need to emerge victorious and the best way to do this is by social distancing.

Here are 10 key points from the PM’s address:

1. Stay indoors as much as possible to avoid getting infected by coronavirus.
2. The world has never seen a danger as grave as this, do not step out of homes March 22 from 7 am to 9 pm.
3. Only those involved in essential services should venture out of homes.
4. We are indebted to doctors and those in essential services and we must salute them from our homes and encourage them for 5 minutes on March 22 at 5 pm.
5. Doctors, nurses, flight crew, media persons, government officers, delivery executives put themselves at risk to service us, we must thank them.
6. Those over 60 years of age must remain indoors at all times for the next two weeks, unless extremely necessary.
7. If you think nothing will happen to yourself, you are wrong, it [coronavirus] can happen to anyone.
8. Do not visit hospitals for a routine check-up, instead call you family doctor to reduce the burden on them.
9. Pay salaries to everyone who work for you, even if they are unable to come to work.
10. Let all those who are not in essential services work from home.

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PM Modi on coronavirus highlights: Don’t go to hospitals for routine checks, practice social distancing, says PM

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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PM Narendra Modi on coronavirus LIVE: Prime Minister Narendra Modi will address the nation at 8pm on the measures taken by the government to combat the coronavirus pandemic in India. The government has disallowed scheduled international commercial passenger aircraft to land in India beginning March 22 for a week. “No commercial aircraft shall land in India after midnight falling between March 21 and March 22 till midnight falling between March 28 and March 29,” Lav Agarwal, Joint Secretary, Ministry of Health and Family Welfare, said at a press conference. “These are temporary measures being announced to contain the spread of Covid-19 virus and will be reviewed later.” State governments have been asked to request the private sector to allow 50 percent employees to work from home. IndiGo Airlines has announced salary cuts across various levels of its organisation as demand for flight tickets has fallen sharply following the coronavirus outbreak. This has impacted revenues of the airline severely.

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Navy sets up fully-equipped quarantine facility for Indians arriving from COVID-19 hit countries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Indian Navy has set up a fully-equipped quarantine facility at INS Vishwakarma at the Eastern Naval Command (ENC) in Visakhapatnam for Indian nationals arriving from coronavirus affected countries. Around 200 people can be accommodated at the centre which has “suitable facilities and arrangements”, according to PIB.

“The quarantine camp is fully equipped to accommodate nearly 200 personnel with all suitable facilities and other arrangements,” PIB said.

Those who are shifted to the camp will be closely monitored by a team of naval personnel and medical professionals of ENC. The move is to ensure social distancing and will incorporate all protocols laid down by the Department of Health and Family Welfare.

#COVID19#SayNo2Panic#SayYes2Precautions#MoDAgainstCorona#IndianNavy #HarKaamDeshKeNaam#भारतीयनौसेना#हरकामदेशकेनाम https://t.co/nVmEcRTdpP

— SpokespersonNavy (@indiannavy) March 19, 2020

As a precaution, all those evacuated will be kept under quarantine for 14 days. ENC will coordinate with state and district health officials “to ensure adequate preventive care is provided to all evacuated personnel and to prevent the spread of the virus”.

The government is taking necessary measures to ensure that the COVID-19 is contained in the country. Prime Minister Narendra Modi is scheduled to address the nation on March 19 at 8pm on the coronavirus situation.

Click here for LIVE updates on the coronavirus pandemic.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Homegrown companies take lead in developing cheaper, faster COVID-19 test kits

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian companies are going on war-footing to developing kits that can test patients for coronavirus. One such company is Chennai-based Trivitron Healthcare, which is internally validating its home-grown COVID-19 PCR test kit.

PCR or Polymerase Chain Reaction is the method where the sample of an infected people is collected by lab technicians from the throat or nose. Trivitron plans to submit the test kit with the National Institute of Virology (NIV) in Pune for approval next week. Following which the company will make the kit available in the market.

The USP of the test kit is its pricing. Trivitron has claimed that it will become 50 percent to 70 percent cheaper for labs to test samples when compared to other kits. Experts suggest that one of the key reasons for the reduction in cost is the material used to manufacture the kits. They are all indigenous, hence the overall cost of the product is reduced.

Another advantage is mass production of the kits. Trivitron has the ability to manufacture up to 500 to 1,000 test kits per day. The company said that once the approval is received from NIV-Pune, they will manufacture the kits as per the government’s requirement.

Additionally, Trivitron is developing a kit for point of care testing. With 85 percent accuracy, the point of care kit will test antibodies in minute quantities of blood.

Another company that has received a nod from regulators for its COVID-19 test kit is CoSara. The molecular diagnostic company is based in Gujarat with a manufacturing plant in the state. The company is a joint venture between Ambalal Sarabhai Enterprises (India) and Co-Diagnostics (US). The company’s COVID-19 test kit reportedly delivers results within three hours.

Even as Indian companies are making headway on developing coronavirus test kits, Swiss-based Roche Diagnostic recently received USFDA’s emergency authorisation approval.

The company has received the go ahead for the diagnostic test kit from the Central Drugs Standard Control Organisation earlier this week. The advantage of this kit is that it allows the testing of up to 1400 samples per day. Moreover, it is automated with no manual intervention. Roche will import select quantities of the kit for product performance evaluation.

While the progress made in the developments of the kits is commendable, experts have pointed out a potential bottleneck at NIV, Pune. Industry sources say the number of approvals for COVID-19 tests are piling up which could lead to a delay in approvals.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Coronavirus impact: Bad times for luxury watch industry; Rolex shuts all manufacturing facilities

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Luxury watch makers are feeling the heat of the coronavirus pandemic and are preparing for the worst as sales dwindle and manufacturing plants being shuttered down. Swiss watchmaker Rolex announced on March 17 that it would close all plants for the next 10 days, over concerns of COVID-19.

The luxury watch industry was already under pressure following political unrest in Hong Kong, which is the biggest market for the product. According to Bloomberg, a 49-percent discount is being offered on second-hand Cartier timepieces in a week-long sale on the site Watchfinder.

Brokerage firm Sanford C. Bernstein said that the next six months will be the worst for the luxury goods industry. Luca Solca of the company said, “This scenario is worse than in 2008, as there doesn’t seem to be any offset — other than possibly a quantum of solace from online.”

Other factors such as surging gold prices and the global slowdown will further impact the luxury watch industry. Exports from Swiss watchmakers dropped the most in February, especially to China and Hong Kong. Bloomberg reported that shipments slumped 52 percent and 42 percent to both the destinations, respectively.

Over 59,000 people are employed by the Swiss watchmaking industry, who could be affected by the slump in sales.

Click here for LIVE updates on the coronavirus pandemic.

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Find out how coronavirus is impacting all industries; aviation, hospitality worst hit

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The novel coronavirus outbreak is causing serious concerns across India with three deaths reported as of March 18 and confirmed cases rising to 151. Precautionary measures are in place and those with symptoms and travelling from affected countries are being quarantined.

However, the economic blow from COVID-19 to countries is quite alarming. Here’s a look at how various sectors in India have been impacted.

Banking sector:

Banks across India are working at almost full strength to ensure availability of essential banking services to customers. CNBC-TV18 spoke top private and public banks to assess the damage the virus has caused to the sector.

One of the top private banks in the country said that the bank’s branches are functioning normal, and no work from home policies have been implemented. “Banking is an essential service, we can’t just ask our employees to leave,” said a senior executive from the bank.

“Whatever corporate functions can be carried out from outside locations or homes are being carried out remotely,” he added, saying whoever has requested for leaves due to health reasons has been granted leaves, but branches have the usual number of employees to carry out day to day functions.

Another private banker said banking services cannot be scaled back unless there are clear instructions from the government or the regulator to do so, adding that no work from home policy has been implemented so far.

Aviation and hospitality

The aviation industry is the worst-hit among sectors with people cancelling international and domestic business and leisure travel. The impact is visible on hotel business as well and stocks it is airline and hotel stocks that have been the hardest hit during the market meltdown over the last couple of weeks.

E-commerce companies

With an increasing number of people preferring to stay at home, work from home and shop from home, there is a surge in online orders on ecommerce platforms. Amazon, Flipkart, BigBasket and Grofers are witnessing a rise in order inflows.

This has led ecommerce companies to engage more staff and delivery personnel to meet demand, prompting a surge in hiring part-time and full-time employees. E-tailing platforms have seen a 15-20 percent spike in gross merchandise value (GMV) in the first 15 days of March compared to February, and a massive 50 percent growth in GMV in categories such as grocery, health and wellness.

IT sector

The virus has impacted client operations across regions and sectors and the IT industry is expected to witness tremors in H12020. An anonymous survey across senior executives of 10 top IT companies indicated that Q3FY20 (January 2020 to March 2020) and Q1FY21 (April 2020 to June 2020) will see the effect of COVID-19 on earnings. Majority of the players indicated that a recovery should be likely only by the quarter ending December 31.

Sources in these companies confirmed that new contracts worth up to $3 billion have been postponed by clients due to the disruption caused by the coronavirus fears.

Auto

The already troubled auto sector has reported a sharp decline in footfalls at showrooms. A survey of major auto dealerships indicated that walk-ins at showrooms have fallen by half in the week following Holi.

From a month ago, walk-ins are down about 45-50 percent, mainly in metros such as Pune, Mumbai, Delhi NCR, and other cities such as Kerala, Karnataka and Tamil Nadu, where the positive cases of COVID-19 are more pronounced.

Startups

The startup space in India including those in sectors such as travel, ridesharing, co-working are starting to feel the stress from a dip in consumer sentiment. However, there is some cheer in a couple of sectors like e-pharmacies and online groceries that have seen a big jump in demand due to increase in buying essential goods as there are fears that stores could shut in the near future.

FMCG

The coronavirus impact is being witnessed in the fast moving consumer goods space with India Inc putting stringent protocols in place to ensure safety of employees. Consumer goods companies rely heavily on on-field, factory and distribution centre staff. To ensure the safety of these employees, companies are encouraging rotation based shifts and minimal workforce in a bid to limit physical contact with one another.

Fintech

Fintech major Paytm has said that it witnessed a massive surge in digital payments as more people are working from home using digital payments to make purchases. “We have been witnessing 20 percent growth in digital payments as compared to the regular days. Since February, the number of users visiting the Paytm app and the number of sessions per user has also increased,” a Paytm spokesperson was quoted as saying.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Yes Bank says all services available now; withdrawal limit lifted

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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After 13 days of hardship for customers, Yes Bank said it has resumed all banking services as the moratorium imposed on the lender was lifted on Wednesday evening.

Besides, the lender would extend banking time for three days starting Thursday.

Soon after the lifting of the 13-day moratorium at 6 pm, some customers took to social media complaining that they were not able to access certain services, including internet and mobile banking.

“Our banking services are now operational. You can now experience the full suite of our services. Thank you for your patience and co-operation. #YESforYOU @RBI @FinMinIndia,” the lender said in a tweet.

There are also concerns in certain quarters that Yes Bank could see significant amount of deposit withdrawals.

“To serve you better, our branches will open one hour earlier at 08:30 hours from March 19 to 21, 2020. We have also extended banking hours across branches for our senior citizen customers, from March 19 to March 27, 2020, 16:30 hours to 17:30 hours,” the bank said in another tweet.

On March 5, the Reserve Bank of India had imposed a moratorium as well as superseded the board of the then struggling Yes Bank. Deposit withdrawals were capped at Rs 50,000 per account apart from other restrictions.

Under the Yes Bank reconstruction scheme, SBI and seven financial institutions, including private sector lenders, have infused around Rs 10,000 crore in the bank.

Yes Bank’s deposit base eroded by Rs 72,000 crore to Rs 1.37 lakh crore as of March 5, 2020. The same was at Rs 2.09 lakh crore as of December 31, 2019, as per data shared by the bank last Friday.

On Tuesday, then Yes Bank CEO-Designate Prashant Kumar said the private sector lender has taken adequate steps to ensure availability of funds for customers.

“All our ATMs are full with cash. All our branches have adequate supply of cash. So, from the Yes Bank side, there is absolutely no issue on the liquidity front,” Kumar had said.

With the lifting of the moratorium, Kumar is now the Yes Bank CEO.

However, certain customers of the bank vented their grievances on Twitter after the moratorium was lifted.

Some of them indicated that they might shift their money from the lender and posted their grievances tagging the bank’s Twitter handle.

Replying to some of the tweets, the bank apologised for the inconvenience caused to the customers and said it was “facing intermittent issues”.

The private sector lender has got support from its largest investor State Bank of India (SBI), which holds 48.21 per cent stake in the bank.

SBI alone has invested Rs 6,050 crore into the bank. ICICI Bank and HDFC (Rs 1,000 crore each), Axis Bank (Rs 600 crore), Kotak Mahindra Bank (Rs 500 crore), Bandhan Bank and Federal Bank (Rs 300 crore each) and IDFC First (Rs 250 crore) have invested in Yes Bank.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Wall Street slumps at open as stimulus high fades

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Wall Street’s main indexes slumped at the open on March 18 as growing signs of coronavirus damage to corporate America overshadowed optimism about sweeping official moves to protect the economy.

The Dow Jones Industrial Average fell 1,048.69 points, or 4.94%, at the open to 20,188.69, while the S&P 500 opened lower by 92.69 points, or 3.66%, at 2,436.50. The Nasdaq Composite dropped 432.47 points, or 5.90%, to 6,902.32 at the opening bell.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow