The garment industry, mostly geared to exports to the West, has laid off most of its employees. They now face an uncertain future as business will be slow to take off even after the pandemic
By the end of May, Anjali had informed her office – a garment export house situated in Delhi, boasting an annual revenue of $35 million – that she would be able to come back to work. This was as restrictions imposed due to Covid-19 eased and border movement was allowed, which meant she could leave her home in Uttar Pradesh’s Gorakhpur to where she went before the countrywide lockdown and was stuck at ever since.
But Anjali, who had been working as a designer for the past four years here, was told she was no longer an employee of the company. No formal letter was sent to her by the human resources department then, nor now, which is more than a couple of months later. She is one of the many who have been rendered jobless in the fashion industry, as it suffers huge losses due to Covid-19 lockdown, and the consequent economic slowdown.
Before this year’s pandemic, exports of textile and clothing products including handicrafts was a lucrative business, garnering $40.4 billion in India during 2018-19. Readymade garments accounted for almost 40% of the total textile exports, according to the Ministry of Textiles’ latest available annual report from the same year.
With the major textile and apparel export destinations for the country being the EU and the US with 48% of the total textile and apparel export, it would be a slow recovery for this sector. Covid-19 closed down not just ports and grounded cargo planes, but also resulted in closure of retail stores. Wazir Advisors, a business consulting firm, said in its report ‘Impact of Covid-19 Scenario on European and the US Apparel Market’ that apparel consumption by the two would reduce by $300 billion.
And while money matters, we must also look at this sector for what it purveys in a country with a huge job crisis. The ministry of textiles report points to the importance of the industry as an employer, with 4.5 crore people directly and another six crore people in allied sectors, including a large number of women and rural population, working in this sector.
This is worrying, for although exports will pick up from the stagnation it was in during the lockdown, the rise will not be quite the same as before and people like Anjali will become a cost-cutting measure for companies.
In fact, according to data from the Centre for Monitoring Indian Economy (CMIE), the number of salaried people losing their jobs amid the Coronavirus pandemic has surged to 18.9 million since April, with around 5 million jobs lost in the month of July.
It should be noted, however, that the loss of around 5 million jobs in July comes after around 3.9 million jobs were gained in June, as per the data. In April alone, 17.7 million salaried jobs were lost, followed by 100,000 job losses of salaried employees in May.
Re-hired when needed
People like Ravi, (name changed) another employee of an export house, feels relieved to have a job, despite being informed of a salary cut of 20% each month, till at least December of this year. He, like Anjali, is a designer, who was tasked with catering to a particular US department store. “They have told us no orders will be sent for the entire year. But we have been able to secure some new buyers so I have been given their charge”, Ravi tells us, a reason why he thinks he still has his job.
“The heads of departments were tasked with cutting their team by 50%. I was informed in May that I didn’t make that cut.”
Ravi believes the new buyers and his proven record with his company helped him get his job back. “30% of the workforce had been removed. Now however, as more buyers are approaching us, employees once fired are getting reinstated.” Dismissing someone and hiring them back could also be a strategy to not pay the staff when operations are in a lull.
And it’s not just the export houses and the employees suffering but consequently the buying houses which work like the middle-men between the international buyers and the export house.
According to the website Apparel Resources, and Ravi’s knowledge about the same, buying house Li & Fung, has rendered over 120 employees from its India office jobless. And companies like Asmara and Triburg have gone with salary cuts.
Indumati has been working in the fashion industry for nine years now, but only February of this year joined a buying house as a senior merchandiser. She is one of those who managed to keep her jobs but has not been paid since April, with no assurance of when she will be paid — only a promise of getting it when things get better.
But the reality is so grim, she says, that even if her employers don’t pay, no one will leave. “No one is hiring and there are many people looking for a job. If we say anything we may be removed, and there will be someone to take that place. We would be looking for a job for months then”. At least here, she believes, she has a chance of seeing the money she has earned enter her bank account.
During our conversation, she tries to justify both the entities and their losses, and subsequent action of lay-offs. “When the pandemic first hit, our summer collection orders were about to go. Consignments which had reached the Mumbai port could not be sent to their destination because of the lockdown. So, the export house lost a lot of money because the international buyers will not pay till the stock reaches them. Likewise, the buying house would have made money only when this consignment reached its destination. Now all that money has tanked because the season has changed.”
Her company, which also has a separate division working with artisans in villages, is now helping them learn how to make masks, one of the only lucrative apparel products during this pandemic.
Pushplata, who runs her own export house agrees: that masks and PPE kits are what are now helping some manufacturing units stay afloat. The operations for her company, White Orange, which has been around for 16 years now, has had no work since the lockdown.
With her buyers in Spain and Netherlands, she says since the end of February, she was told there would be no orders; the orders they were working on got cancelled. “They didn’t want to take any risks. The client base of the designers I cater to are mostly holidaymakers in Ibiza and Malaga. Now with no tourism, they will not be putting in any orders”.
The only consolation, she says, is that she is not alone. “I am from NIFT and I have many friends in the garment industry. I know people who have not been paid for the consignment for the orders that have even reached them. Even the big brands like Zara have not taken everything but have paid for the garments they have taken.”
For Pushplata’s company, the uncanny calm may last for long as she only produces summer collections. During the peak period, she says they have a strength of 100 employees, after which her staff strength would come down to 50%. When lockdown struck, she had 45 people still with her. “When chaos began, one day we sent about 15 people home. Then we were left with 30, many of them were from Kanpur so we got them a bus and transported them home. The rest who were left, we paid them and gave them food and gave them a place to stay. After the lockdown was over, we sent them back home.”
Now her company is left with just four employees who are doing some sampling work for outside vendors. She does tell us that even though she would want to restart operations, people who returned to their villages are unwilling to return. “I told them I cannot start functioning without you. But they say their families are scared and don’t want them to leave. So, nothing can be done.”
Her brother Avinash, who has been running an embroidery business for the past five years, is facing the same problem. He had a much smaller scale of functioning, with 10 craftsmen, but now he is left with just a couple. “I even drove to bring back an employee who looked after everything but his parents didn’t allow him to come to Delhi. They are afraid of the situation here”.
He doesn’t know what the near future holds. “We were doing as much as we could in the first couple of months of this year. We got orders from vendors working with Amazon.com. We could get about 2,000-piece orders for a month and make a couple of lakhs every month. Now after April, all my workforce went home. And then when things opened up, our workers did not return still. Then slowly a few came back. And people worked over time, even those working in the day were working at night to complete the old orders. Now we don’t make any profit, I am just able to pay the pending salaries, and the rent,” he tells us.
For smaller ventures, a struggle to stay afloat; for the bigger players, a calculated reasoning on what matters most.
(Cover: The number of salaried people losing their jobs amid the Coronavirus pandemic has surged to 18.9 million since April // PHOTO: Getty)