Very similar situation persists in India where the section VIIB of the Industrial Disputes Act says that a company needs government permission to lay off people

Very similar situation persists in India where the section VIIB of the Industrial Disputes Act says that a company needs government permission to lay off people if they have 100 or more employees. As a result a lot of companies never go beyond 99, giving up growth and employment prospects for a large part of the population. Moreover, this creates a vast class of underemployed people outside the protection of those laws, euphemistically called the "informal sector".