Over 5000 employees of Vodafone, Idea may lose their jobs
As Vodafone India and Idea Cellular look to save costs, it could lay off 5,000 of the combined workforce of 21,000 employees in the next few months. Both the companies are making losses, facing huge revenue pressure and have a combined debt of about INR 1,20,000 Crore. The nodal team handling the merger has advised them to shed at least 5,000 employees in the next couple of months.
Both the companies wish to start new operations without any burdens and eliminating the excessive manpower would ease the burden in times of margin pressures in a debt-heavy industry.
According to the report, those who fall in the bottom quartile as per the performance assessment for this appraisal season will be asked to go. Besides this, the profiles that have a mirror image in the two firms, including divisions such as supply chain and procurement, will also be cut down as the companies want to create a cost-efficient merged firm.
Job cuts are one of the implications of mergers and acquisitions and Telecom sector at large has also witnessed heavy job losses. According to data from the Centre for Monitoring Indian Economy (CMIE), around 1.5 million jobs were lost from January-April 2017, with the telecom sector being among the hardest hit ones. Vodafone itself had earlier axed 1,400 people as a part of its merger plans with Idea. Bharti Airtel had dismissed 1,500 people from the sales and retail teams after it acquired Telenor.
Last month, the two sides announced the top leadership team of the merged company, Balesh Sharma as the new CEO for Vodafone-Idea India telco and Suvamoy Roy Choudhury as the HR Head of the merged business.
It’s been a year since the Vodafone-Idea merger was announced. The companies were then looking to create the country’s largest telecom operator with the widest network in the country. Now, the merger has received all clearances except the telecom department and as per speculations, is expected to close sometime in May. The combined entity will be the largest mobile phone operator in India, replacing Bharti Airtel, with almost 42 percent customer market share and 37 percent revenue market share.