It seems the dark days for India’s telecom sector are not set to be over any time soon. In fact, in all probability, they are going to intensify. India’s telecom sector is in bad shape and the raging storm of consolidation and mergers could result in job cuts in thousands.
Merger of Kumar Mangalam Birla-owned Idea Cellular and Vodafone India will have wide-ranging ramifications and implications for the services, industry, the staff and consumers. The merger could result in as many as 10,000 employees losing jobs over the next year. A large merger, for example that between Vodafone and Idea, would make thousands of jobs and job roles redundant due to duplication.
The Economic Times, which has cited several experts and executives, says massive job losses will be inevitable when telecom operators go in for merging operations in order to streamline their businesses to cut down on redundancy and minimize costs.
“I know there will be job cuts. I don’t know if I would stay in my job tomorrow. Many employees have gone into save-my-job mode or have started looking out. I can’t concentrate on my work. I have a family to support. In the current scenario, it would be difficult to find a similar job in Telecom. I have already given 15 years of my life to this sector. Changing courses now would be very difficult for me,” said a mid-level executive of Idea Cellular, on condition of anonymity.
A Vodafone employee, who has been with the company for a number of years, said employees were expecting a 30% job cut after the merger.
“There is confusion at the moment. There were always speculations about an impending merger but after the confimation, it seems our fears were right. Several employees have started looking out for opportunities,” the employee said on the condition of anonymity.
There is widespread uncertainty and anxiety among the 30,000-plus employees of both the companies as they have been hearing murmurings for quite some time now.
“There is no doubt staff at the head office and circle (offices) are on shaky ground, putting 10,000-25,000 jobs at risk. Add those indirectly employed and the number could rise to 1 lakh,” says an HR consultant.
Although Kumar Mangalam Birla has announced that there would be no major or substantial job cuts at Idea Cellular after the merger with Vodafone India, it remains to be seen what “substantial” or “major” mean. The coming days will decide how many are set to lose jobs. However, most industry experts and media reports ballpark the figure at 30% job cuts.
Apart from the distressed Telecom sector, job cuts have been happening left, right and centre across industries. HSBC India is laying off 600 while there are reports of Cognizant releasing around 10,000. The jobs are already plummeting in India, although GDP growth rates continue to remain high. This is leading to jobless growth which is not good for India‘s economy. In fact, it could be a result of uneven economic growth in the country which could lead to severe social disparities.