With sectors like textiles fearing job cuts due to global financial crisis, the ministry of corporate affairs said on Thursday reducing workforce during the time of crisis is not the solution.
"Cutting workforce is not very useful or intelligent strategy. Human resource is our critical resource as at the end of the day, its a human team that helps," said Jitesh Khosla, joint secretary in the ministry, at a conference on cost accounting organised by the Confederation of Indian Industries.
He said rather for gaining a competitive edge in such times, the companies should work out more practical strategies and ensure effective cost management.
In order to be competitive, the companies should now add value to their services and innovate ways to become efficient.
With the continuing onslaught of the global financial crisis, companies are turning to large-scale lay-offs to cut cost and tide over the crisis.
Commerce secretary G K Pillai recently quoted textiles ministry estimates to say that there will be job losses of about 5,00,000 in the sector in the next five months.
At global level, many entities have announced lay offs. Citigroup has announced a lay-off of 52,000 people with others like American Express joining the fray.
However, Finance Minister P Chidambaram had said though the moderation in growth in India will affect the creation of new jobs, but this, in anyway, will affect the existing ones.
He had said the economy is likely to grow between 7-8 per cent and this growth is job-creating growth.
Planning Commission deputy chairman Montek Singh Ahluwalia had also said the total employment will not be affected though a few sectors may witness reduction in new job creation.