The organised private sector in India is going through major job cuts & layoffs due to the COVID-19 pandemic. India had a nationwide lockdown, which started on March 25th. Though the lockdown was successful to contain the spread of the deadly virus to much extent on the other side lockdown significantly impacted economic activities throughout the nation.
The migrant workers and unorganized sectors are the ones who are worst hit by this pandemic and lockdown. The organized sector is also not an exception which is hit by this crisis.
Even the tech companies in India have seen thousands of layoffs because of COVID crisis. Most of the industries have struggled to make money, the airline, hospitality, restaurants are among the organized sectors that are currently facing layoffs and pay cuts. Renowned companies such as BookMyShow, Ola, Uber, Zomato, Oyo rooms, and many others had to lay off the employees due to business slowdown. The combined scale of all the job losses taken together now goes into the thousands and the actual number on the ground is likely to be significantly higher.
Recently on 1st May, the government has announced that it will be opening up the economy in an organized and planned way, which will take place in phases. However, the situation is quite tough and we need to be prepared for the worst.
Here are a few tips which will help you to be prepared for the worst and survive a layoff or pay cut.
Focus on necessities and eliminate luxury
Before unemployment hits you, you need to differentiate between things which are essential and which ones are luxurious to you. Food, utilities, shelter, phone bills are some of the basic necessities whereas eating out, shopping, spending money to see a movie or buying unnecessary things are some of the luxuries, stopping your expenditures on these will not affect your life and it will add to your savings as well.
Discuss your severance package
A severance package is basically pay and other benefits that an employee receives from the employer if they are made to leave the company from the employer side. It usually consists of a few month’s wages and some additional benefits as per the rule.
All companies do not offer these packages, hence you need to contact your office’s administration section and find out the scope and procedure to get the compensation.
Look for your investments and retirement plan
If you are investing regularly in some investment plan, you need to evaluate if you can continue with your investments. Making a budget will help you with your calculations and analysis. If you think, putting money can affect your monthly budget, put it on hold for a few months. This is suggested because most investment tools have flexible payment options.
Opt for the moratorium period
Seeing the COVID crisis RBI announced a moratorium period of three months for the ongoing loans. The decision making power lies to the bank whether they want to pass on the benefits or not. Well, most of the banks have decided to pass on this benefit to its customers. Hence, in case you have any ongoing loans and you think it will be difficult for you to serve the EMIs then you can talk with your lender and opt for this facility.
Upgrade your skills
If you are among the one who has been laid-off from your current employment, then you can be part of several programs that help individuals develop and even offer the necessary financial aid to the unemployed. Sign up for job fairs and government unemployment schemes to avail maximum benefit and support. You can also enrol in online courses present on Udemy and others which help you to develop your skills. Doing this will help you to get a new job.
Consider taking a personal loan
In case you are not able to bear your basic expenses while in your unemployment period or when you are under a pay cut, you may have to look for ways to get funds that can help you to continue your day to day life. Taking a personal loan can be one of the solutions to such a situation. Personal loans are multipurpose in nature, and you don’t need to secure by giving collateral or a guarantor against it. You wouldn’t be required to offer any collateral or securities. Repayments are simple and are made under a flexible tenure period ranging from one year to five years.
However, you must find a new job so that you don’t default on the EMIs, and having a job also makes you more eligible for a personal loan.
Get your finances in order
One of the most important things you need to take care of after being laid off is your finances. Make a list of every expense of yours. Make a realistic budget and determine your average monthly expenses and evaluate if you have enough resources to get by for the next few months. If not you can consider utilizing your investments. For example, you can take a loan from your life insurance policy or a loan from your PPF account.
The PPF allows the investor to take a loan against the balance from the third financial year of investment made, and the borrowed amount can be repaid within the next three years. The maximum loan one can avail from your PPF account is up to 25% of the balance. The rate of interest charged on the borrowing is 2% more than the prevailing PPF interest rate.
Start looking for a new job
Once you are laid off start looking for a new job. Update your resume on online job portals such as Naukri.com, LinkedIn, Monster.com and others. Spend more time looking for relevant job posts and advertisements. Ask your friends and other people in your network for recommendations.