Reliance Communications plans to reduce manpower by 3,500-5,500

Jul 08 2014, 09:45 IST
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Anil Ambani-led Reliance Communications reeling under a net debt of Rs 40,177.6 crore. (Reuters) Anil Ambani-led Reliance Communications reeling under a net debt of Rs 40,177.6 crore. (Reuters)
SummaryAnil Ambani-led Reliance Communications reeling under a net debt of Rs 40,177.6 crore.

Reliance Communications Ltd is working on shifting over 5,000 employees to its outsourcing partners to prune its debt.

The debt-laden company, in a presentation posted on its website, said that it plans to shift “5,500 call centre staff to third-party BPOs” among several other cost-optimisation measures. With strategic focus on cost management and margin expansion, the company will work on a “new organisation structure, ... greater empowerment ... manpower to be reduced by 3,500-5,500,” the presentation said.

The flagship company of Anil Ambani’s Reliance Group is reeling under a net debt of Rs 40,177.6 crore as of March-end. During the fourth quarter of the last fiscal, the company’s profit nearly halved to Rs 156 crore, as it posted a 48.5 per cent dip in the consolidated net profit. The company’s revenue increased 5.36 per cent to Rs 5,405 crore.

Last month, the firm raised about Rs 4,808 crore by selling shares to institutional investors for trimming its debt burden. Reliance Communications has over 15,200 employees on its rolls and with the downsizing, it expects to focus on core business of telecom, value added services and data.

As such, the company has already moved 9,500 employees to its partners’ rolls in a bid to make the company lean. When contacted, a Reliance Communications spokesperson said, “We have no official comment on the matter”.

As such, apart from downsizing, the company is also looking at unlocking value through real estate. There is an in-principal approval on demerger of the real estate held by Reliance Communications into a separate unit called Reliance Properties Ltd, which will be a separate listed company. All the shareholders of Reliance Communications will receive “fully tradable pro-rata shareholding, free of cost in Reliance Properties Ltd... The preliminary and indicative monetisable value on development is estimated at over $2 billion,” the presentation said. The company also plans to cut network and gross acquisition costs by 10-15 per cent.

Over Rs 40K-crore debt

* The company, in a presentation posted on its website, said that it plans to shift “5,500 call centre staff to third-party BPOs”

* The flagship company of Anil Ambani’s Reliance Group is reeling under a net debt of Rs 40,177.6 crore as of March-end

* During Q4FY14 the company’s profits nearly halved to Rs 156 crore, as it posted a 48.5% dip in the consolidated net profit

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