The number of regular employees at Vodafone Idea combine has reduced by over 1,800 to 9,881, since the two announced a merger in March 2017, according to the annual report of the company for the financial year ended March 31, 2018.
There were 11,735 regular employees in Idea Cellular as on March 31, 2017, which got reduced by nearly 16% in a year. The merger was finally completed in August 2018 after all the regulatory approvals.
With several operators winding down their businesses, job losses in the telecom sector have been heavy. FE had recently reported that telcos are expected to let go of around 50,000-75,000 employees in 2018, according to an estimate by Randstad India. Others like TeamLease Services peg the number at 90,000.
Some consultants believe that the sector could shrink by another 5-10% over the next 12 months. Moreover, those doing work specific to the industry such as running tower operations would find it difficult to get employment elsewhere. Typically, super specialised skills account for about 30% of the jobs in telecom.
According to consultants, while not everyone will lose his job immediately since the businesses are running, opportunities are limited since growth in general is stunted. Also, companies could increasingly resort to more automation so there will be fewer customer-support kind of roles on offer.
Vodafone Idea, which is in the phase of leveraging merger synergies, has advanced the target of realisation of these by two years to FY21. The merged entity had earlier set FY23 deadline for completing merger synergies.
Last month, the combined entity posted a consolidated net loss of Rs 4,974 crore for the July-September quarter, underlining once again the financial stress the telecom operators are undergoing due to below-cost tariffs, which are leading to customers migrating to lower average realisation per user (Arpu) offerings.
Earnings for the September quarter include results for Idea Cellular up to August 30 and Vodafone Idea from August 31 to September 30 and hence are not comparable to earlier periods. The company said the figures for revenue, EBITDA key performance indicators for Q1 and Q2 of FY19 are proforma figures and presented as if Vodafone Idea was a merged entity from April 1, 2018.
Accordingly, revenue during the quarter at Rs 12,024 crore was down 7.1% sequentially, while EBITDA at Rs 980 crore was down 28.7%. Margin at 8.1% was lower than 10.6% in the preceding quarter.
The company also said though headline tariffs remained stable during the quarter, with customers moving to lower bundled offers, Arpu dropped to Rs 88, down 4.7% compared with the preceding quarter. This is the lowest compared to Jio’s Rs 131.7 and Bharti’s Rs 101. The company also lost 13 million customers during the quarter.