Popular Indian biscuit maker Parle Products may cut up to 10,000 jobs owing to the prevailing macro-economic situation, according to a company executive.
Rural distress has taken a heavy toll on fast moving consumer goods (FMCG) sales for the past few quarters. Companies like Hindustan Unilever, Nestle have reported weak growth owing to the slowdown in consumption.
According to reports, Mayank Shah, category head at Parle Products, has said that if there is no tax relief in the form of a GST rate cut, the company may have to lay off 8,000 to 10,000 people.
Apart from the auto sector, FMCG companies are also facing strong headwinds. Hindustan Uniliver, which saw a significant decline in its sales volumes during the June quarter, had said that "the near-term demand will remain subdued given the macroeconomic conditions."
The stressed rural sector, which comprises one-third of the company's market, is the key factor behind the company's tepid performance. The revival of the distressed agriculture sector would be a positive for the FMCG industry.
Announcing its latest quarterly results, ITC had said: "The FMCG-Others segment delivered a resilient performance during the quarter amidst a marked slowdown in the FMCG industry across urban and rural markets".
The maker of Maggie noodles and coffee, Nestle India, said: "We are proud of our strong performances in Maggi, Kitkat and Munch among others. However, environment continues to be challenging with headwinds in commodity prices and softer demand conditions".