Telecom Sector Witnessing Disturbing Employment Ratios, Lay Off Count Goes Up To 75,000
In the telecom sector last year, approximately 25% of the employees were employed and their estimated number was 75,000. Meanwhile, consolidation between telecom companies, tower firms and vendors has increased. Employee costs in this industry at present are only 4–5%, but during the last few years, their salary was increasing rapidly. Now, the challenge of reducing expenditure in front of companies is its first falling on the employee.
Some telecom companies have been shut down, some have reduced their business, and some are showing exit routes to employees and contractors working on contract. Compared to a year ago situation, now 75% workforce is left in this sector, not only that, there is a possibility of more sorting in the coming time. A Ramachandran, partner of a search firm, Emma Partners, said, “Three years ago, there were 3 Lakh employees in this area. In the last 12 Months, 25% of them have been laid off. In most cases, some employees have released few months ago, in some cases, it was employees that were relieved after giving 3–6 Month salary.”
Ramachandran said that 35–40% of employees working in vendor companies have left the sector. Meanwhile, telecom operators also removed 25–30% of employees. Now there are 2.25 Lakh employees in the industry. Some telecom companies have a merger. Thereafter, the number of employees will decrease further. It has been seen that the majority of middle and senior employees are being affected by the trimmed down. They do not have more job options. Vivek Mehta, executive director of recruitment firm ABC Consultants says, “In the telecom sector, more than 50% of the employees are mid-level managers. 25–30 of them are those who have been removed or have been asked to go.”
According to the Center for Monitoring Indian Economy (CMIE) estimates, in the period from January to April, 1.5 Million jobs were reduced in 2017. This means that overall employment opportunities in India have declined. Vivek Mehta of ABC Consultants told that more employees would be removed from the industry. About 15% of the people in this sector will be excluded.
There is a loan of Rs 5 lakh crore on the telecom sector. There is a huge reduction in the income, margin and cash flow of companies. After the entry of Reliance Jio in September last year, the process of consolidation in the industry has also accelerated. Idea, the country’s third-largest telecom company, and second largest company Vodafone India are on their verge of a successful merger. At the same time, Bharti Airtel has announced the purchase of Tata Teleservices. Earlier, it had bought Telenor India.