The coir industry in Kerala, the birthplace of Indian coir, is facing significant challenges due to mechanization, leading to widespread labour displacement and migration. This issue is not adequately addressed by government policies, as unemployment affects all segments of the industry and negatively impacts disadvantaged social groups. The decline in the coir industry is causing a shift in the manufacturing sector, with small-scale and household sectors being abandoned and large export firms moving to other states. This article provides insights into the difficulties in finding employment and the rising rate of unemployment in the context of the coir industry, a field often disregarded in national economic policies. Using a mixed-methods approach that incorporates surveys, structured interviews, and secondary data analysis, the study looks at the relationship between unemployment and the modernization of coir enterprises, concentrating on how these changes effect job prospects and the socioeconomic position of workers. According to the findings, despite consistent government support, other initiatives are insufficient, resulting in a significant loss of employment, labour displacement and frequent labour migration.