KARACHI: The trend of retrenchment in the main industrial areas of Pakistan's largest city, Karachi, has deepened as around 250,000 employees, mostly contractual and daily wage, have lost their jobs over the last six months as economic downturn badly hit the industrial production.
Falling export orders amid depressed demand of goods worldwide, declining local production and rising cost of doing business due to hike in gas and power tariffs, are the main factors that have left industries with no option but to go for cost-cutting by reducing the workforce and production.
Korangi Association of Trade and Industry (KATI) Chairman Zahid Hussain said yesterday that at least 50,000 workers out of over 500,000 had lost their jobs mostly daily wage and contractual employees. The axing of workforce in the last four months has mainly taken place in garments, stitching, knitwear, hosiery and other textile-related units, which are labour-intensive, he said. He said that so far there had been no downsizing in the pharmaceutical, lubricant, engineering industries in the Korangi industrial area.
"The job situation has been stable in these sectors," he added. Korangi industrial area has 4,000-4,500 units. Zahid painted a gloomy outlook of industrial production in 2009 as the government had shown its intention to further jack up the power tariff before the current fiscal year ends in June after the recent increase in gas rates.He further pointed out that many banks had already stopped extending financing to the industry and some of them were offering loans at very high mark-up rates. A random visit to the Site Industrial area showed that a textile industry displayed a note stating "No jobs," and the similar notice was also pasted opposite to the same factory.
One of the employees of the textile mill tried to cover it up by insisting that it was an old notice and that the mill had hired some new hands a day before. When approached, Site Association of Industry Chairman M A Jabbar said the job situation was alarming. He claimed that many industrial units had informed the association through letters that they were reducing the electrical load and had asked the association to forward this information to the Karachi electric Supply Corporation. The association has received these kinds of letters in the last 10 days from 10-12 units belonging to different fields of trade.