Covid-19 crisis: Indiabulls sacks over 2,000 employees to control expenses

Gagan Banga, vice-chairman and chief executive officer, Indiabulls Housing Finance, reiterated that the staff had not been asked to leave due to lack of business and it was a routine process.
Indiabulls Group has asked over 2,000, of its total of 26,000 employees, to leave as an outcome of performance review at the end of financial year 2019-20.

 
Though the company said the attrition was in line with the process it follows every year (of 10-15 per cent attrition after performance reviews), its employees have a different story to tell. Scores of employees took to social media to express disappointment and said they were asked to resign over WhatsApp calls. On Twitter, some said they had been asked to resign by May 31 and that there was no severance package and salary would be paid only for May.

 
An employee, working for Indiabulls Consumer Finance and based out of Nagpur, said their manager asked a few to resign by May 31, as the company was facing financial issues. At least 50 per cent of the staff of the said branch has been asked to go. The employee said they were asked to leave as they could not generate business during the period of the lockdown. These facts could not be independently verified by Business Standard.

 
Gagan Banga, vice-chairman and chief executive officer, Indiabulls Housing Finance, reiterated that the staff had not been asked to leave due to lack of business and it was a routine process.

Banga said the operating cost of the company is Rs 30-33 crore per month, whereas the interest cost is approximately Rs 650 crore. “So, the focus now is to manage interest expense, which is a far bigger cost element than spending on salaries. The cost to income ratio is 12.5 per cent,” he said.

 
The company is not looking to add to its workforce now but it may look at hiring again in the second half of FY21 after things normalise.

 
The company has not made any sanctions or disbursements in the past two months. While they have reopened branches in green zones, they are preparing to reopen the ones in orange zones.

 
Some tweets also claimed the company had asked employees to convince customers not to opt for moratoriums. The Reserve Bank of India had asked all finance companies to allow a moratorium of three months on term loans.

 
Banga said almost 50 per cent (by value terms) opted for moratorium in the retail segment of their book, and almost 70 per cent opted for moratorium in the wholesale segment.


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