New Delhi, February 15: While Indian telecom sector is eying the biggest waves of consolidation this year, what may come as a sheer challenge for the Industry would be to absorb the existing staff.
As per economic times, the massive job loss is inevitable in the telecom industry and as much 25000 jobs would be hit in the coming year.
“There is no doubt that staff at the head office and circle (offices), are on shaky ground,” said an HR head of a key telecom provider to ET while citing risk to at least 10,000-25,000 jobs. He further said As much as 1 lakh jobs would be hit if we include those who are indirectly employed by the sector.
As per the report when ET spoke to more than a dozen analysts, recruiters and company executives, it was found that telecom employees are scared about jobs being on the line despite assurances.
According to Sandeep Chaudhary who is chief executive officer, Aon Hewitt Consulting, “optimisation across operations, workforce and supporting infrastructure will be key and could potentially render nearly one fourth or more people redundant.”
The report further says it may take about 12-18 months for a clear picture of layoffs to surface. The biggest challenge in face of these mergers is the merged entity would seek to ensure that distributors maintain the network and operators continue to expand.
“The bigger question is where the people who are made redundant will go,” said K Sudarshan, managing partner, EMA Partners International. “Where are the jobs, especially if they are out–and-out telecom guys or people in their late 40s or 50s and yet to become CXOs? The sector is pretty much saturated.”
As per the media reports, Kumar Mangalam Birla-owned Idea Cellular and Vodafone Plc are exploring a merger to combat Reliance Jio.
Jio has already disrupted the market with its free offer that has been extended till March 2017. Aircel and Anil Ambani-run Reliance Communications BSE -3.34 % (RCom) are looking to combine. Russia’s MTS has been folded into RCom while Norway’s Telenor will either merge with the RCom-Aircel combine or be acquired by AirtelBSE -1.02 %.
Consolidation has taken hold of ancillary operations as well, especially towers. Last year, American Towers (ATC) bought Viom Networks and lowered the combined workforce by about a third, said people aware of the matter. This was followed by the $1.6 billion takeover of RCom’s towers by Brookfield. Every tower company is in play–Idea and Vodafone want to sell standalone operations as do smaller outfits like Tower Vision. The larger Bharti Infratel and Indus Towers are also expected to see a change in control.