Vodafone and Idea Merger Will Lead to Massive Layoffs

In a rather shocking development, Vodafone-Idea merger will reportedly lead to massive layoffs. The ongoing merger process of Vodafone India and Idea Cellular might lead to loss of about a fourth of the telcos’ combined 21000 strong workforce, reports ET. The companies have been advised by the nodal team heading the merger to shed as many as 5000 employees. Idea and Vodafone currently employ around 11,000 and 10,000-plus people, respectively. “The retrenchment has to happen swiftly because in times of margin pressures in a debt-heavy industry, both companies do not want to start new operations burdened with excess manpower,” said a senior executive aware of the development to the publication.

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This is likely happening in upcoming months as both the companies look to save on costs, eliminate duplication and improve efficiency. Citing sources, the report said both companies are making losses amid huge revenue pressure and a combined debt of some Rs 1,20,000 crore.

The telecom sector has been reeling under immense pressure ever since the launch of Reliance Jio’s 4G service which introduced free unlimited calling and data services.

The merger has received all go ahead barring permission from the Department of Telecom (DoT). Sources revealed to ET that employees who fall into the bottom quartile in the performance assessment in appraisal season would be facing the axe. Moreover, the profiles that will have a mirror image in two firms, including divisions such as supply chain and procurement, will also be cut out as companies want to avoid extra costs.

An industry insider says that the actual numbers may exceed more than 5,000 since duplication will be in large numbers. Those facing the axe will also have a tough time getting new jobs as vastly shrunk telecom sector has already let go of around one lakh employees.

The Aditya Birla Group, which owns Idea Cellular, declined to comment, on the issue. The diversified conglomerate which has operations across cement, retail, textiles and financial services among others have in the past accommodated some of its retrenched employees in other group companies.

However, a Vodafone spokesperson denied any information regarding layoffs saying that the companies haven’t yet received the final merger approvals. He said “This is pure speculation and totally untrue. No decisions have been taken about the workforce of the merged entity, although it is fair to assume that employees will benefit from the opportunities that arise from working for a significantly larger operation.”

Meanwhile, with the firms focused on the merger process, Bharti Airtel and Reliance Jio are looking to grab subscribers from Idea and Vodafone. Post-merger, however, the combined entity will replace Airtel to become the largest telecom operator with almost 42% customer market share and 37% revenue market share.

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24 Comments on "Vodafone and Idea Merger Will Lead to Massive Layoffs"

 

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Shaan
April 16, 2018 3:40 pm 3:40 PM

Idea charges 100/- rupees for MNP sim in Telangana(Andhra Pradesh circle).so no one try to port into idea.where as Airtel,,vodafone offers mnp freeof cost.sohere is no customer addition in idea.

Airtel User
April 17, 2018 6:29 pm 6:29 PM

Poor operator idea, dont have money also to issue sims.

Fazal
April 16, 2018 2:21 pm 2:21 PM

Nothing shocking. Especially if (Reliance) Jio is the one behind all of this. Turned entire India into a private company with his “friends” in the PMO office.

Airtel User
April 17, 2018 6:30 pm 6:30 PM

Private companies are more efficient then government companies, i suppose ?

Girish Gowda | BengaLuru
April 16, 2018 4:29 pm 4:29 PM

Jio came into existence under Congress. So maybe true.

S Reddy
April 16, 2018 1:12 pm 1:12 PM

Was expected… But what is worth pointing out and exposing is that the same liars Vodafone & Idea had claimed, when they announced merger, that there will be no big or mass lay offs… google search for their statements. These scumbags are blatant liars and frauds. Shame on them!

Kaushik IMA
April 16, 2018 5:25 pm 5:25 PM

What, everyone knew there would be layoffs. What’s more is Vodafone is exiting India but smiling in front of cameras. Can’t let share values go down with shock announcements you see!

Nikhil Mumbai-Pune
April 16, 2018 10:46 pm 10:46 PM

More importantly, the merged entity should not go at Airtel in future!!!!! I feel in 2022,onwards this merged entity will have stable growth!!!!!

Kaushik IMA
April 17, 2018 12:41 am 12:41 AM

Don’t worry, nothing is going to Airtel. Even Tata Docomo will continue a few months more.

What’s interesting is Airtel told TRAI they have brought Tata and telenor into ICR and then lied to shareholders that Tata and Telenor took independent decisions to shut towers and start ICR. LOL

Nikhil Mumbai-Pune
April 17, 2018 1:34 pm 1:34 PM

Airtel network has been choked in Pune totally due to additions of Tata and Telenor customers!!!!!

Nikhil Mumbai-Pune
April 17, 2018 1:33 pm 1:33 PM

Interesting to know about Tata and Telenor!!!!!!

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