India: Reliance Jio reduces employees
Author: Devina Sengupta, Economic Times, India, Published on: 9 June 2019
"Reliance Jio lets go of contractual staff", 29 May,2019
Reliance Jio Infocomm sharply reduced the number of contracted employees, along with some permanent staff, as it strives to cut costs and improve operating margins, which fell in January-March…The telco, however, said it continues to be a net recruiter and there was no question of any “cost pressure-led action”.
While major redundancies have been on the consumer-facing side, other impacted areas include supply chain, HR, finance, administration and networks…
… the company has let go of some 5,000 people, of which 500-600 are permanent employees and the rest are contracted… Jio has 15,000-20,000 employees on its payrolls. However, there is a much larger number that works for the operator but are third-party employees. Third-party employees can be employed by a staffing firm which in turn gets payments from the company hiring them, in this case Jio.
For the January-March quarter, Jio’s earnings…fell 5 basis points on quarter to 39%, with total expenses rising almost 8% on quarter, mainly on the back of higher network operating costs, finance expenses, and depreciation and amortisation charges.
Employee costs typically range 5-6% among telecom operators and companies working to control costs tend to drop the axe first on the workforce, said analysts.
Since its entry in September 2016, Jio has upended the market with discounted rates that have helped it net nearly 307 million subscribers by March-end. The company has a revenue market share of around 31%, according to Fitch Ratings, and it generated a net profit of Rs 840 crore in the fourth quarter of FY19.