India’s Richest Man Mukesh Ambani backed Reliance Jio has reportedly laid off thousands of its employees as a part of company’s cost-cut drive and to further improve operating margins, which showed a downfall in the January-March quarter of 2019.
Reliance Jio has reduced the number of contracted employees, along with 10% of permanent staff, by 5000, said an Economic Times report quoting sources familiar to the development.
The pink slips had been handed to most employees are from areas such as including Logistics, supply chain, Human Resource, Finance, Administration and networks. The development has taken place is also partly because of no growth in operating margins in the last two years.
Currently, Reliance Jio is estimated to have over 20,000 employees on its payrolls. It also has a major amount of the workforce from third-party staffing agencies.
In the fourth quarter, Reliance Jio, despite posting a profitable quarter, witnessed average revenue per user (ARPU) going down to Rs 126.2 from Rs 131.7 in the previous quarter. The company’s EBITDA plunged 5 basis points on quarter to 39%, with overall overheads and expenses surging to almost 8% on quarter, primarily on the back of higher network operating costs, finance expenses, and depreciation.
Reliance Jio at the end of March, 2019 mobile subscribers numbers standing at 306.7 million. In terms of the user base, it dominates around 26% market share whereas Ambani-led firm has a revenue market share of around 31%.
According to market veterans and industry experts, the aggressive pricing strategy and offering customers data at a cheaper price range has led to impact operating margins.
This is very scary for employment perspective and some laws should be amended or changed for wages from top management to ground level employees.
Everybody understand that top management has to take strong decision to boost growth of companies as well as economic is concerned but ground level employees also doing hard work to get things done what is told by top management. So they also play a very important role in industry growth.
Suggestion is to re-constitute wages or salary pay for ground level employees as well as first line managers. They don’t want pay in crores but minimum wages must be calculated as it takes 364 years for normal salary paid person to become rich man as MLA or any entitled person from government department.
As per latest numbers coming in from staffing service provider TeamLease, by next one year, more than 60,000 telecom jobs will be destroyed, and the same number of employees will be without any job and it will be a bloodbath in the telecom sector.
I really hope that these more than 5000 employees are able to find #jobs soon and spring back into their career.