With business hit-hard by the Covid-19 pandemic, Scan Café, located at the Thimphu Tech Park in Serbithang, has laid off 29 employees who were on probation period on June 17.
This is the second time the company has laid off employees.
Scan Café is a US based company, which design photo books for customers of Shutterfly Company in the USA. With USA hardest hit by the pandemic, Scan Café is facing serious business challenges.
The Chief Executive Officer of Thimphu Tech Park, Tshering Cigay Dorji said that Scan café management had been trying not to send off any employees despite pressure from falling business orders. However, since the Covid-19 situation had been worsening in the US, the situation became too difficult for the company, he said.
Scan Café’s Deputy Manager of Operations Jaget Adhikari said that orders for photo books decreased by 40 percent from May and the company had tried to keep all its employees, but the situation was not getting better.
“We informed the labour ministry and decided to relieve 29 people recruited in April,” he said. Between March and April around 70 people were recruited in batches. Jaget Adhikari said that due to high demand in business, they recruited new employees. “The business world is unstable,” he said.
In 2018, Scan Café relieved 67 employees when the company lost its European Union clients. Employees signed a petition to the labour ministry. Labour ministry studied the case and found out that Scan Café had followed labour regulations. The company had assured that preference would be given to the laid off employees if any job opportunities arose in future.
Some of the employees who got relieved again were the ones who were relieved in 2018. One of them said that she had a stable job when the company called her back. “I left my job after Scan Cafe assured me the job on a permanent basis,” she said.
As per the Labour Act 2007, a contract of employment of one year or more may contain a period of probation of a maximum of 180 days within which period either party may terminate the contract by giving the other party notice of seven days.
Jaget Adhikari said that although labour law doesn’t mandate compensation during probation, the employees were paid one month extra salary. He also said the business depended on demand and supply, if the business got better, these employees would be again given first priority.
One of the relieved employees said that if the company was hit by the pandemic, the company could have kept us with half salary when the business was down.
The CEO said that it was not fair to blame the businesses for letting people go if the companies were not able to sustain. “This is no different from the hotels that laid off their employees after Covid-19,” he said. Scan Café used to employ over 700 people in the past few years. Now, it employs about 250 people.
The CEO said that due to advancement in Machine learning and Artificial Intelligence (AI), automation of work was getting better. The number of required jobs in this field would see a gradual decrease over the years and it must be the reason why number of people working at Scan Café came down, he said. “This time, however, the reason is solely because of impact of Covid-19 situation in the US,” he said.
“When we talk about certain jobs being affected by AI, we should also remember new jobs are being created because of AI,” the CEO said. He said that, for instance, Imerit Technologies, also located at the Tech Park, specialising in annotating data (text, images, video) for machine learning, could increase the requirement of man power as AI gains momentum in the country.