A senior industry executive painted a bleak scenarios for the near future of employees in the Indian telecom sector, saying that 30,000-40,000 of them may be asked to go this year.
Indian telecom companies, under intense competitive pressure from Reliance Jio, have not only suffered a terrible revenue loss over the last two quarters, but have also been forced to trim their workforce heavily to keep their operations viable. A senior industry executive painted a bleak scenarios for the near future of employees in the Indian telecom sector, saying that 30,000-40,000 of them may be asked to go this year.
The news could come as a blow to Prime Minister Narendra Modi, who is already facing a challenge from huge job losses staring in the face of techies in the Indian IT industry in wake of various challenges to the business, while his government fields questions about “jobless growth” of the country over the last three years of his rule.
Indian telecom companies have laid off about 10,000 people over the last one year, Punit Garg, President, Reliance Communications, said on Friday while giving a presentation to the reporters on the state of the telecom sector. This is not all. Garg further said that another 30,000-40,000 people in Indian telecom sector may lose jobs this year owing to the huge pressure the industry is in.
Earlier last month, Tata Teleservices laid off 500-600 people from sales and other related functions, and from across locations in the country, In yet another sign of the increasing stress on the telecom industry. The company had said staff was let go to tide over difficult times in the hyper-competitive telecom market.
Indian telecom industry is witnessing an intense tariff war triggered by the entry of Reliance Jio, whose disruptive market positioning has left most of the other telecom companies bleeding. The telecom operators are facing tremendous pressure on revenue and profitability, even as the industry’s total debt and liabilities have soared to nearly Rs 8 lakh crore.
Reserve Bank of India, in a recent notification had asked banks to make provisions at rates higher than the regulatory minimum rate, based on an evaluation of risks and stresses in various sectors of the economy. Further, it also asked banks to ensure a quarterly review of the sectors to which they have exposure with an intent “to evaluate the present and emerging risks and stress therein”.
Indian telecom sector has been operating under tremendous pressure after the entry of Reliance Jio into the space, which, with its free-to-dirt-cheap tariff offers has forced the incumbent players to drastically cut their tariffs in order to retain their customer base.