Vodafone-Idea Cellular job losses: Over 5,000 employees may be sacked, says report

Vodafone-Idea Cellular job losses: The industry has been reeling ever since the entry of Reliance Industries backed telco Reliance Jio which has been offering free unlimited calls and even started off with free data. This sent prices crashing across the board for all incumbent players as they tried to keep pace with RJio and this has hurt revenues.

Vodafone-Idea Cellular job losses: The merger between Vodafone and Idea Cellular itself was much the result of the industry players looking to save themselves from the tough times via consolidation drive. Image source: Reuters

In what has come as a shock for the industry, it is being reported that as many as 5,000 of 21,000 employees may be sacked by Vodafone-Idea Cellular post merger. This is likely to happen over the summer months. The process is to save cost and ensure the merged entity does not have duplication of effort, said Economic Times. The industry has been reeling ever since the entry of Reliance Industries backed telco Reliance Jio which has been offering free unlimited calls and even started off with free data. This sent prices crashing across the board for all incumbent players as they tried to keep pace with RJio and this has hurt revenues. However, reports of layoffs had not emerged so far, although there was talk of how long these companies will be able to shoulder the losses before having to take action in terms of savings and cost cutting.

The merger between Vodafone and Idea Cellular itself was much the result of the industry players looking to save themselves from the tough times via consolidation drive. The combined losses of these companies has been put at a whopping Rs 1,20,000 crore. The order to prune the workforce has come from the panel that is handling the merger to ensure a smooth process that would not add to both the companies' woes. However, even though most of the clearances have been obtained, the the issue is still hanging fire with the telecom department. The issue of job losses is something that few would want to go through.

What is worse, according to ET, job losses may well exceed the 5000 mark by a wide margin and those being laid off may find it even tougher to get alternative employment. However, Vodafone has refused to give an official reaction as yet.

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With Vodafone and Kumar Mangalam Birla led Idea Cellular in trouble, both Mukesh Ambani led Reliance Jio and Sunil Mittal led Bharti Airtel would likely look to grab subscribers who may exit the merged entity. Whether that will lead to further tariff cuts and freebies is still unclear considering that the rates have been at a low for a long time now.

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