Biscuit giant Parle Products Private Limited is going to sack at least 10,000 employees.
The downsizing is a result of the continuous demand slowdown, according to a report in The Economic Times.
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The report also quoted the company as saying that higher taxes in the GST system had forced it to increase prices causing fall in consumer demand.
The report further quoted company official as saying that the company had sought reduction in the Goods and Services Tax (GST) on biscuits priced at Rs 100 per kg or below.
These biscuits are typically sold in packs of Rs 5 and below which are quite popular across Northeast along with the rest of the country.
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But if the government does not provide that stimulus, then the company would be forced to let go of 8,000 to 10,000 people from their workforce across factories, the report quoted.
The report further quoted officials that slowing sales are severely impacting the company.
The company said 12 per cent tax was imposed on biscuits that cost Rs 100 per kg before GST was introduced.
It expected the GST rate to be fixed at the same rate for premium biscuits and at five per cent for biscuits priced lower.
However, all biscuits came under the 18 per cent GST tax bracket, forcing companies to increase prices.
This had a direct impact on sales, the company had stated.
Parle had increased its prices by around five per cent, which resulted in a significant decline in sales.
The company has around one lakh employees in 10 plants and 125 third-party manufacturing units.
More than half of the company’s sales come from rural markets.
The same is the case with Britannia.