Ratan Tata speaks up on industry-wide layoffs amidst coronavirus, says it was a knee-jerk reaction

In a rare conversation with YourStory on Thursday, Ratan Tata, revered industrialist, investor, philanthropist, and Chairman of Tata Trusts, expressed deep anguish over the industry-wide layoffs that have taken place as a result of the coronavirus pandemic.

“The initial tendency when the virus hit (was) lay off people, thousands of people. Is that going to solve your problem? I don’t think it is, that’s the knee jerk reaction that you had from the traditional workplace, lay off people because the business is gone. But you have a responsibility to those people,” Mr Tata said.

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The coronavirus pandemic has hit businesses across sectors hard, with several of them having to resort to layoffs and salary cuts, in a bid to stay afloat. From the startup ecosystem, several unicorns (startups with $1 billion valuations), such as Ola, Oyo, Swiggy, and Zomato, had to downsize their staff, as well as business, at the peak of the pandemic.

“You have no place to hide or no place to escape to, COVID-19 hits you wherever you are so what you have to accept is, that whatever your reasons may be, you have to change in terms of what you consider fair or good or necessary in order to survive,” the 82-year-old doyen said.

He pointed out that for entrepreneurs and companies, sensitivity towards employees is of paramount importance in order to survive and do well in the long run. “We will not be able to isolate ourselves and say ‘oh we will continue to do this because we are doing this for our shareholders’. We are doing it for everyone and you won’t survive in this environment unless you are sensitive, therefore for the first time, people have to be concerned about the place...the workplace,” he said.

Mr Tata also spoke out about the condition that migrant workers and daily wagers found themselves in amidst the pandemic. With no source of income and nowhere else to go, several of them undertook long journeys back home in the sweltering heat, on foot, during the lockdown when there was no public transport available.

“That labour force which was huge, one day was just told, ‘there is no work for you, we don’t have a way of finding means for sending you home’. You are just there, you don’t have food to eat, you don’t have a place to stay. Not wishing to blame anybody but that was the traditional view, that view has changed now to ‘who are you to do that?’ 

“These are the people that have worked for you, these are the people who have served you all their careers so you send them out to live in the rain? Is that your definition of ethics when you treat your labour force that way?” Mr Tata implored all business owners to contemplate.

Watch the full conversation here:

Mr Tata, who first took over as Chairman of the Tata Group in 1991, also said that he believed that if there ever was another crisis like the current one, businesses would be in a better position to tackle it.

“I hope we never have another case, but if we did have another case of this type, I think you’d have a much better understanding of what people could do, companies would be reacting much faster -- the right way, rather than just letting people go,” he said.