RCom Lays off 94% Employees Citing Hyper Competition as Reason for Poor Finances

Reliance Communications, the Anil Ambani led telco which was on the verge of bankruptcy a few days ago has declared that it is in a financial soup and is surrounded by capex troubles, hyper-competition and endless problems as a result of which, it has brought down the count of its employees from 52,000 to 3,400. This number is a massive lay off of 94%. The telco agreed to the statement that the wireless tariff war between the top operators like Bharti Airtel, Idea Cellular, Reliance Jio and Vodafone India is going on without a sign of calming down. In a market like this, RCom has failed to survive and has suffered financially.


The company stated, “However, post its wireless B2C business exit in January 2018, RCom is no longer affected by the severe and prolonged wireless sector hyper-competition.” It further added “As is evident from the latest sector revenue report released by the Trai, the wireless sector continues to be on a downward spiral, with 21% revenue decline on YoY basis. Overall revenue market size shrunk by over Rs 26,000 crore on an annualised basis.”

RCom clarified that it has converted into a pure B2B player as of now and it will now be catering to the enterprise communications need along with diving into the data centre space in India with its 35,000 business customers.

In addition, the company’s global submarine cable business in enterprise data across continents boasts of over 300 enterprise and carrier customers worldwide. As opposed to the 120 million customers which Reliance Communications had previously, including the B2C sector now the telco will be serving only 35,000 customers.

The Anil Ambani-owned telco has a debt worth Rs 46,000 which it will pare using the Reliance Jio deal. The company has also recently sealed a pact with minority shareholders of its tower unit –Reliance Infratel by agreeing to pay them Rs 232 crore.

A pact which might be hovering around Rs 600 crore -700 crore is being speculated for the upcoming deal. ??This deal will help Reliance Communications pull itself out of insolvency proceedings by selling its wireless assets to Reliance Jio and thus giving it a chance to repay its lenders.

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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