Vodafone Idea Limited, which recently became operational is reportedly looking to limit its workforce to 15,000 levels from the existing 17,500-18,000 levels. This essentially means that the merged entity will shed up to 2,500 people from the organisation. While some employees will be moved back to their respective parent companies, some will be taken by natural attrition, according to an Economic Times report. Furthermore, the merged entity will also be moved towards releasing its expected $10 billion synergy benefits from the merger. The telco will also be looking forward to rationalising tower tenancies.
Vodafone Idea Workforce to Be Reduced by 2,500
The merged entity will be reducing the workforce by up to 2,500, which will bring down the number to around 15,000. “There will be some rationalisation, which is natural and the company will look at reducing about 2,000-2,500 employees in the next few months,” said a senior executive aware of the developments to ET. The same person also stated that the company would look into the welfare of the employees as they will be given severance packages. In addition, internal transfers within the parent group Aditya Birla Group will also be explored.
This is not new as in recent times, telcos are reducing their workforce to stay competitive in the industry. It's also said that Vodafone Idea is seeking voluntary attrition, which will help in reducing the workforce automatically. Before the merger itself, both the telcos reduced their workforce by close to 5,000, which brought the number down to 17,500 to 18,000.
Vodafone Idea Limited Looking to Hold Back Promotions and Increments
The same report added that Vodafone Idea Limited would likely hold back the employee promotions and increments for a while. The telco is making this move so as to stay competitive in the Indian telecom market and maintain the leadership position. Having said that, Vodafone Idea denied this employee-related news and termed them as 'speculations.'
Employees from Vodafone India and Idea Cellular Will Be Treated Equally
Senior managers of Vodafone Idea Limited said that the company would treat the employees from both Vodafone India and Idea Cellular equally. As reported by ET, “All employees will be treated with respect,” stated Suvamoy Roy Choudhury, HR head for Vodafone Idea.
A recent report from Bank of America Merrill Lynch added, “We believe one of the most critical points for post-merger Idea-Vodafone would be integration, given the different cultures of both companies — one is a domestic company while the other an international one.”
Service Integration Will Be Key for Vodafone Idea
“On day 1 of the merger, the 2 tenancies of each of these sites will be accounted as 1 tenancy and 1 loading, which should result in Rs 2,000 crore savings on an annualised basis according to estimates,” the Bank of America Merrill Lynch report further added.
For the unaware, Vodafone Idea now has over 73,000 overlapping sites and the first step Vodafone Idea will be performing is the removal of these sites, which will help the telco in power savings.
Bharti Airtel Likely to Regain its Top Position in Revenue Share
The newly formed entity will face some challenges during the initial days. Firstly, Airtel is expected to finish its acquisition of Tata Teleservices, which will boost the company's revenue share in some circles. Once Airtel finishes the Tata Teleservices acquisition, Vodafone Idea Limited might be kicked down from the top position in the revenue market share.