India's Reliance Jio is reportedly axing jobs as it tries to boost profits and slash operating costs in the country's fiercely competitive mobile market.
The operator is said to have cut around 5,000 jobs, including 500-600 permanent roles. RJio has around 20,000 employees on its books but also works with third-party firms that hire workers on a contractual basis. Most of the recent redundancies have reportedly hit staff on the consumer-facing side of the business.
The move is linked to a fall in customer spending and high level of debt. Average revenue per user at RJio fell to 126.2 Indian rupees ($1.82) a month in the March-ending quarter, from INR154 ($2.23) in the final three months of 2017. Debts have climbed to INR670 billion ($9.64 billion).
Reports of cutbacks will trouble telecom sector professionals. Until recently, RJio was the only Indian operator still hiring employees, with others laying off staff.
As a result, unemployment has soared in India's telecom sector. According to a recent report from Team Lease, a prominent recruitment and online jobs portal, the number of telecom jobs is likely to shrink 4% between April and September 2019. The sector lost as many as 60,000 jobs between the 2017 and 2019 fiscal years, according to CIEL HR, a recruitment agency.
Intense competition means tariffs have continued to fall, stunting sales growth despite a surge in use of data services. Uncertainty and low morale have driven many professionals to seek employment in other industries.
Many have been left out of work by a recent spate of mergers and acquisitions. Last year, Vodafone India and Idea Cellular merged to form the country's biggest service provider in the country. Headcount is said to have fallen to about 12,500 employees from a pre-merger level of around 17,000. Redundancies also appear to have followed Bharti Airtel's takeovers of Videcon, Tikona and Tata Teleservices as Airtel removed duplicate roles.
But consolidation is not the only factor. The growing automation of systems and processes in the telco organization is also leading to job losses. Telcos are now exploring new technologies such as artificial intelligence and blockchain, which also threaten to have an impact on the workforce. The skills required in these areas are vastly different from those needed by traditional telecom.
As operators scout for individuals who fit these new profiles, they are likely to release some existing employees. The introduction of fresh talent at the expense of older and more experienced workers could help companies to reduce staffing costs.
In the medium term, the industry is anticipating growth in jobs. The Telecom Sector Skill Council, a non-profit organization set up by Indian operators, reckons the total number of sector employees will grow from about 10 million today to roughly 14.3 million by 2023 as new technologies give rise to new opportunities.
— Gagandeep Kaur, contributing editor, special to Light Reading