Parle Becomes Latest Indian Company to Face Crisis as 10,000 Employees Face the Axe

New Delhi, August 22, 2019:

The name ‘Parle G’ is known to all as many of us grew up watching Parle-G ads and it has often been hailed as ‘India’s Biscuit’.

From kids to the old, all the generations of the country shared an emotional connect with the Rs 5 costing packs of Parle G biscuits, which brought smiles to many faces nationwide with the sweet-and-simple treat.

But the country’s largest biscuit maker on Tuesday announced that it may have to let go of 8,000-10,000 employees if the ongoing consumption slowdown persists.

The layoff is a result of the declining economy that has also led to the layoffs in many other industries.

Mayank Shah, category head of Parle Products, in response to the impending layoffs said, “We have sought reduction in the GST on biscuits priced at Rs 100 per kg or below, which are typically sold in packs of Rs 5 and below, but if the government doesn’t provide that stimulus, then we have no choice but to let go of 8,000-10,000 people from our workforce across factories as slowing sales are severely impacting us.”

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It is to be mentioned that Parle, which makes the popular Parle-G, Monaco and Marie brand of biscuits, employs 1 lakh people, and operates 10 company-owned plants, in addition to 125 third party manufacturing facilities with sales of over Rs 10,000 crore

More than half of Parle’s sales come from rural markets.

Earlier, the sub-below Rs 100 per kg biscuits were taxed at 12%. Firms had expected the GST rate to be fixed at 12% for premium biscuits and 5% for the lower-priced ones. But after the government introduced the GST in 2017, all biscuits were brought under the 18% tax structure, forcing companies to increase prices which affected sales. Following this the Parle, too, increased its prices by about 5%, which led to sales declining significantly, as stated by the category head.

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