Upto 75,000 more jobs at stake as competition intensifies among Indian telcos: Report

Upto 75,000 more jobs at stake as competition intensifies among Indian telcos: Report

  • Telecom companies may axe an additional 75,000 jobs this financial year, say reports.
  • Industry consolidation and newer technologies have put several job functions at risk while creating some new opportunities.
  • Telco infrastructure, retail sales, customer support among job functions that will see maximum impact.
The heated competition over cheap voice and data plans in India’s telecom sector may have been a boon for customers, but they could lead to tens of thousands of people working in the industry getting the axe.

The telecom sector could see 75,000 job cuts by the end of this financial year, according to one report, with most layoffs expected in the financial and customer support segments. Another study has pegged the job cuts at a whopping 90,000, with potential casualties across telecom retail sales, customer support, business and operations and infrastructure segments.

This is in addition to an estimated 50,000 to 70,000 job cuts that have already taken place since 2016, according to Financial Express. For the six months alone ending September, an estimated 15,000 to 20,000 jobs were axed, ET mentioned in a recent report.

Industry competition and consolidation

The telecom sector has been in the midst of a massive shakeup since Reliance Jio’s entry into the space over two years ago, which unleashed dramatic price cuts and forced many incumbents to slash tariffs to keep customers and revenues from slipping. Indian telcos had made the majority of their revenues (70%) from voice calls before Jio entered the market offering free voice plans and cheap data, and that meant - many customers from rival companies defected to the new entrant.

Following Jio’s competitive play, several key industry players have also merged or acquired smaller players, which has led to ongoing industry consolidation, creating a wave of layoffs in its wake. The merger of Vodafone India and Idea Cellular, for instance, was expected to result in up to 5,000 job cuts, according to various media reports.

In the last two years, the number of telecom operators have come down from about 10 to six as of April. The sector could shrink by another 5% to 10% in the next 12 months, Paul Dupuis, managing director and CEO of Randstad India, told Financial Express.

Reliance Communications (RCom) saw a 94% cut in its workforce, while Bharti Airtel downsized its employee count by 12% in two years ending March 2018, according to an FE analysis. Vodafone saw a 17% drop in headcount over the same period.

Meanwhile, government efforts have been afoot to retrain some of the telco workers by pushing them into new skills such as public wi-fi and BharatNet. Newer technologies such as AI are also expected to lead to new roles being created in the industry.