Jobs go missing in Pvt Sector as financial crunch continues

While there has been no official study on the impact of the financial crisis on employment in the private sector, anecdotal evidences indicate that Bhutan’s second largest employment sector after agriculture is in trouble.

Many private businesses that are dependent on government expenditure, loans or are involved in the housing and vehicles sector are either firing employees by the dozens or are not hiring them at all.

The non-availability of loans has also strangled new business ventures which could have created jobs as banks are refusing loans for even credible business plans.

A prominent contractor on the condition of anonymity said, “With delayed payments and no loans I have had to save costs which means letting go of some of my Bhutanese employees.”

Silently but quietly many Bhutanese companies big and small are either not hiring or are letting go of employees, which from the earlier trickle is now turning into a flood.

Dema an employee of a major Bhutanese company said, “My Company is not hiring at all and even those holding jobs may are at risk if the situation continues.”

A snapshot of the worst hit sector is the automobile sector suffering from not only an import ban on vehicles and non-availability of loans but also a sharp increase in overhead costs.

Most of the importers have initiated retrenchment and cost cutting measures, while some have closed their show rooms.

Managing Director of Samden vehicles, Kouenleg Gyeltshen said that reducing employees is one of the cost cutting measures because they have no other options.

“Till now around 40 employees resigned from the showroom,” he added.

“At the moment Samden vehicles has more than 70 employees. Unless our service improves, we cannot pay them well. Therefore we might continue reducing the employees,” Kouenleg Gyeltshen said.

Ugyen Tsechup Dorji of Zimdra Automobiles said Zimdra Automobiles in Thimphu is closed and is now like a grocery shop selling Zimdra Juice and milk.

He said that had the showroom been open, they would have recruited an additional 25 employees in it. He said all the existing employees have been transferred to other departments. “We are transferring the employees of showroom to Zimdra Food Unit,” said Ugyen Tsechup Dorji

Tshewang Lham an employee under Zimdra Automobiles said, “We are guilty of getting paid for doing nothing as there is not much work due to the import ban on vehicles.”

She added that they are among the lucky ones not getting fired from their jobs or it would have been an easy excuse for an employer to get rid of their employees.

Earlier the General Manager of Ugen Earthmovers, Kash Chhetri said 15 employees from her company are being laid off and the company’s branch in Gelephu has been shut down.

Hyundai Motors said they had to reshuffle two staff members to other department and three employees had resigned from the company.

“Till now we have been getting income from the old stock and sustaining but we can foreshadow the real effect from this month,” said General Manager of Hyundai Motor, Pema Lodey indicating cost cutting measures.

Most car dealers said that due to the import ban on vehicle and heavy equipments they had to reduce their employees from the administration and sales department.

Another hard hit sector with reduction in government expenditure in advertising has been the print media with more than a 100 jobs being lost in the last one year itself and with more to follow as a direct consequence of cut back in advertisement.

Most newspapers say that the situation was bad enough before the crisis but cut down on government expenditure coupled with lack of loans have lead to drastic cost cutting measures.

What has added to the problem is the lackluster performance of government projects like IT Park and also failure to attract adequate FDI projects. Bhutan this year saw hundreds of IT graduates trying for very limited slots in the RCSC. The remaining ones have not been able to get jobs in IT Park which is itself suffering from a lack of investors.

However the Labour ministry said that these cost cutting measures are entirely business and enterprise decisions.

Labour Minister Lyonpo Dorji Wangdi said that for any decision business and enterprisers should follow the Labour Act and regulations.

He added that ministry has learned through media reports of the car dealers contemplating retrenchment and possible reshuffling of some employees.

“We have not yet received any number on such retrenchment neither from car dealers nor from the employees,” said the Labour Minister Dorji Wangdi.

He said businesses have dips and enjoy booms as well. “The Rupee crisis is a flickering dip and business should come into its proper place sooner or later,” said the Labour minister.

“As per reports the dollar and rupee crisis has improved a lot and so conditions will improve,” he said.

The construction sector which so far has not been as badly hit as the vehicle business is also feeling the pinch with many construction companies on the verge of closure due to non availability of loans and inadequate jobs.

Construction is regarded an entrepreneurs job and though the laborers are mainly Indian a lot of the office, secretarial and support staff are Bhutanese.

CAB President Ugyen Tsechup Dorji said the construction sector would feel the impact more with new construction works. “There will be inconveniences as they are not allowed to buy heavy vehicles and are unable to avail loans,” he said.

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One comment

  1. If this report is true, then the Labour Ministry seems totally out of touch with the realities on the ground..

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