New Delhi: Garment exporters in India are scaling back their businesses by laying off workers as hundreds of stores in the US and Europe, the main export destinations for Indian apparel, have shut or gone bankrupt.

Global slowdown: An Ann Taylor Retail Inc. store in New York. Among US stores, the retail chain store is closing 117 outlets. Gino Domenico / Bloomberg

“Many Indian exporters have closed their garment manufacturing units. A leading exporter in Mumbai has temporarily shut two factories and laid off 2,000 workers," Apparel Export Promotion Council (AEPC) secretary general Vimal Kirti Singh said in a letter to the commerce ministry.

Textile, including apparel, is the second largest employment generating sector in India after agriculture.

Among the US stores, Steeve and Barry’s Llc. and Mervyns Llc. have gone bankrupt, AEPC said. It said Pacific Sunwear of California Inc. has closed 150 stores, while Lane Bryant, Fashion Bug and Catherines are shutting a total of 150 outlets.

Besides, Foot Locker Inc. is winding up 140 stores and Ann Taylor Retail Inc. is closing 117 outlets.

Those scaling down their operations include big names, such as Eddie Bauer Inc., Cache, Talbots and Gap Inc., AEPC added.

Exports of readymade garments from India tumbled 6.59% in September over the same period last year as a direct consequence of the global economic slowdown, Singh said, adding, “The market sentiment is very weak."

Meanwhile, industry body Assocham (Associated Chambers of Commerce and Industry of India ) said 25-30% employees in businesses such as IT, aviation, steel, financial services, real estate, cement and construction, may lose their jobs as firms initiate cost-cutting measures.

These seven sectors are no longer in a position to sustain their operations with existing manpower strength, Assocham said in its study titled ‘Jobs Scenario Post-Diwali’.

“HR heads of these sectors have drawn up conclusive plans to curtail their workforce by 25-30%, announcements for which is likely in the next 10 days or so," Assocham president Sajjan Jindal said.

Without naming the firms, Assocham said they have no other alternatives to sustain operations with squeezed margins after drastic cost-cutting measures such as denying bonus and ex-gratia.