Call it the price of consolidation or the perils of competition – layoffs have become the order of the day in the Indian telecom industry. Reportedly, close to 25 per cent (75,000 people) of the telecom workforce has been issued pink slips in the past one year, which witnessed a high degree of consolidation among the incumbents and the exit of smaller players like Sistema, Telenor and Videocon. The resultant loss in indirect jobs is estimated to be even higher.
Unfortunately, for the remaining 225,000 employees, the future looks equally bleak as job cuts of bigger magnitude are on the anvil with RCOM scaling back operations.
With the continuing decline in revenues and profitability, the incumbent operators are taking all steps to curtail costs. Trimming the workforce – in terms of both permanent and contract employees – seems to be the rational thing to do, given that they cannot pull the plug on network expansion or service roll-outs.
Once the impending mergers of Idea and Vodafone and of Airtel and TTSL reach execution stage, more jobs (particularly in overlapping functions) will be axed. The sale of tower assets by incumbent operators such as Idea, Vodafone and RCOM to towercos may lead to further job cuts.
The impact will be more telling on middle- and senior-level employees. And those with niche skills will find it even harder to adapt to other industries.
In such a scenario where telecom companies have no option but to take severe costcutting measures including downsizing to sustain operations, it is perhaps time to introspect. Why did the government not step in at the right time, when industry debt was mounting, or when the tariff wars were raging? Why did it fail to act when the financing community red-flagged the risks and stopped lending? More importantly, what can it do now to stop the situation from snowballing into a bigger crisis?
