Pink slips on the rise across telcom firms

After decline in profitability and piling debts, the telecom sector is in the middle of a large-scale layoff. Estimates suggest more than 25,000 direct employees across telcosmay have been hit over the past few months and that several more thousand jobs may face the axe soon. Overall, more than 100,000 telecom jobs, including indirect employment, could be at risk.

The sector is going through a challenging phase and consolidation is a reality. Recent merger announcements include those between Reliance Communication (RCom) and MTS, Bharti Airtel and Telenor, Vodafone and Idea Cellular. Tata Teleservices is also likely to announce a closure shortly. Although RCom’s merger with Aircel has been called off due to legal hurdles, overall, the industry is heading towards an era of four to five operators.

The already stressed sector has been witnessing profit erosion following Reliance Jio’s entry last year, forcing incumbents to match the low tariffs offered by the newcomer.

Asked about the layoffs, Faisal Kawoosa, principal analyst telecommunications & ESDM, CyberMedia Research, said there was no doubt that disruption had been caused by the new age telco Jio, impacting business and revenues of many operators. “Consolidation has played its part as it means streamlining of resources including people.” The sector is going through an evolutionary phase, which means that traditional skill sets would not guarantee jobs any longer, according to Kawoosa. The entire value chain in telecom was under immense pressure to do “magic” with the offerings that would come through meshing of new skills with the existing in telecom domain, he said. “So, for the next couple of years we will see the industry welcoming people who bring in expertise and skills to mesh with the offerings. That would mean fewer opportunities of the existing job roles.” Among other cost heads, one to be hit hard in the industry is manpower, he said. Every single operator has had to cut back on people, sources said. It’s not just the direct employees who are facing the brunt, but retailers and other indirect staff as well would be impacted.