Throughout 2017, India’s telecom sector has witnessed a loss of 75,000 employees or almost a fourth of its workforce in the industry. This massive layoff was owing to the merger of operators, tower firms, and vendors that consolidate together, as part of the strategy to remain afloat amidst the severely competitive business environment.
In the telecom industry, manpower makes up for 4-5 percent of the total costs. However, there was no reining in of salaries in the last few years. Now that company expenses need to harnessed and cut, employees will be the first casualty from such move. Employers are closing down shop and shrinking operations in terms of both permanent and contract employees, then start to run a tight ship. Only 75 percent of the workforce is now remaining with more exits are on the anvil, Economic Times reports.
Regarding to the issue, A Ramachandran, partner at search firm Ema Partners said that about from overall three lakh employees in the sector a year ago, 25 percent of which have moved out of the sector in the last 12 months.
Most job losses are through involuntary attrition, meaning that the companies asked them to go with a few months’ notice, and in some cases it often comes with a severance package of 3-6 months’ salary. Further, Ramachandran said that 35-40 percent employees in vendor companies have left the sector, while operators have seen 25-30 percent of their workforce shrink in the same period.
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Meanwhile, for the 2.25 lakh employees stayed in the sector, the down time has just started because once mergers take place, overlapping areas will see manpower further slashed. Those who have niche skills will most likely find it difficult to adapt turn and adapt to other industries. According to the recruiters, such condition will affect middle- and senior-level employees who will have fewer places to go.
“About 50 percent employees in the telecom sector are middle managers and at least 25-30 percent of them who quit or were asked to go belong to this category,” said Vivek Mehta, executive director for ABC Consultants, who deals with telecom hiring. This means that about 20,000 employees from the mid segment are not employed by the industry anymore.
Centre for Monitoring Indian Economy found that about 1.5 million jobs were lost in January-April 2017, which means fewer places to get hired when overall employment in India Inc has dipped.
ABC Consultants’ Mehta added that there will be another, fresh round of exits once mergers take shape since consolidation is still in approval stages for many. “There will be at least another 15 percent reduction in manpower,” he added.
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