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Insolvency Code Shields 85% of Jobs
11 Oct
Summary
- Insolvency proceedings retained approximately 85% of company workforces.
- Some companies even increased staff during the resolution process.
- Record number of resolution plans approved in recent quarters.
The Insolvency and Bankruptcy Code (IBC) has demonstrated a significant role in job preservation, with companies undergoing insolvency proceedings retaining approximately 85% of their workforce. An analysis by the Insolvency and Bankruptcy Board of India (IBBI) found that out of roughly 300 companies studied, the workforce declined only slightly from around 96,200 employees to 82,100 employees. This indicates the IBC's stabilising influence during corporate insolvency resolution processes (CIRP).
Further insights from the analysis revealed that 12-15% of companies actually increased their staff during resolution. Experts suggest that factors such as fresh capital infusion from new owners and renewed worker confidence likely contributed to this growth. This employment resilience is occurring alongside a sharp increase in insolvency resolutions, with the National Company Law Tribunal (NCLT) approving a record 107 plans in the September 2026 quarter.
