• Deccan Chronicle
  • Andhra Bhoomi
  • Asian Age
  • ePaper
  •  Auto Refresh
Home

ePaper
Last Updated:04:53 AM IST | Saturday, Jan 28, 2023
  • Home
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
Menu
  • Home
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
Home > Companies > Parle may cut up to 10,000 jobs amid slowdown, falling demand
Companies
Parle may cut up to 10,000 jobs amid slowdown, falling demand
By  
REUTERS   , Published : Aug 21, 2019, 1:07 pm IST | Updated : Aug 21, 2019, 1:07 pm IST

Parle is not the only food product company to have flagged slowing demand.

Parle, founded in 1929, employs about 100,000 people, including direct and contract workers across 10 company-owned facilities and 125 contract manufacturing plants.
Parle, founded in 1929, employs about 100,000 people, including direct and contract workers across 10 company-owned facilities and 125 contract manufacturing plants.

Bengaluru: Parle Products Pvt Ltd, a leading Indian biscuit maker, might lay off up to 10,000 workers as slowing economic growth and falling demand in the rural heartland could cause production cuts, a company executive said on Wednesday.

A downturn in Asia’s third-largest economy is denting sales of everything from cars to clothing, forcing companies to curtail production and raising hopes that the India government will unveil an economic stimulus to revive growth.

A sharp drop in Parle’s biscuit sales means the company may have to slash production, which may result in layoffs of 8,000-10,000 people, Mayank Shah, category head at Parle, said in a telephone interview from Mumbai.

“The situation is so bad, that if the government doesn’t intervene immediately ... we may be forced to eliminate these positions,” he said.

Parle, founded in 1929, employs about 100,000 people, including direct and contract workers across 10 company-owned facilities and 125 contract manufacturing plants.

Shah said demand for popular Parle biscuit brands such as Parle-G had been worsening since India rolled out a nationwide goods and services tax (GST) in 2017, which imposed a higher levy on biscuits costing as low as 5 rupees, or 7 cents a pack.

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 and where two-thirds of Indians live.

“Consumers here are extremely price-sensitive. They’re extremely conscious of how many biscuits they are getting for a particular price,” Shah said.

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 India 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.

Market research firm Nielsen said last month India’s consumer goods industry was losing steam as spending in the rural heartland cools and small manufacturers lose competitive advantages in a slowing economy.

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 5 rupees.

“Obviously, there is some serious issue in the economy,” Berry had said on a conference call with analysts.

Shares in Britannia were down 1.5 per cent, as of 0620 GMT, having fallen as much as 3.9 per cent earlier on Wednesday.

end-of
Tags: 
parle, lay off, jobs, employment, parle-g, workers
Location: 
India, Karnataka, Bengaluru
Latest From Companies
HUL CMD Sanjiv Mehta said the results show that the long-term structural opportunity of FMCG in India remains intact.

HUL Q1 net profit rises 5.7 pc to Rs 1,897 crore

The management of Radar has built and exited 3 different businesses themselves which helps the sensitise first time and even veteran entrepreneurs.

Radar India advisors scales a new high

The top seven cities of Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Pune and Bengaluru accounted for 4.45 billion km.

Delhi sees more night trips than Bengaluru, Mumbai, says Ola

Most Popular

Mukesh Ambani 9th richest on Forbes' real-time billionaires list
Top credit card myths harmful for your financial well-being
Microsoft CEO Satya Nadella tops Fortune's Businessperson of the Year 2019
Employment growth slowed down in last two years: report
GST structure: key challenges and its solutions

Editor's Picks

Income tax e-filers drop by over 6.6 lakh in FY19: Official data
Swiping on your smartphone reveals a lot about you to your social media company
  • Read Financial Chronicle as it appears in print.
  • Subscribe, and get it delivered in the inbox everyday.
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
  • Home
  • About Us
  • Contact Us
  • Terms of Service
  • Privacy Guidelines
  • Copyright © 2019 Financial Chronicle, All rights reserved
Developed & Maintained By Daksham