Business

Indian Telecom Sector is Going Through Major Changes and Job Cuts are a Side Effect

Telecom tower on a white building

Indian telecom sector has been in the news for the last couple of years for more reasons that one. Telecom players have been in a fierce competition for survival due to the disruption caused by Jio. The cheap data rates and almost free voice calls resulted in the companies to be cutting costs wherever possible. Most of the big companies were facing huge losses and feared that they might go out of business if they kept competing with the deep-pocketed Jio. Indian telecom sector needed a necessary step towards retaining their position in the market and then started the infamous Mergers and Acquisitions.

Airtel and Jio were the two largest players in India until a few weeks ago. Vodafone, the UK based player and Idea Cellular came together to become Vodafone Idea, which is currently the biggest player in the Indian market with over 400 million subscribers.

Airtel was the largest player already but they faced a stiff competition from the newcomer Jio. They had to acquire the Japanese telecom player in India, Docomo, to gain a little market share and cut down on costs too on acquiring new subscribers.

Mergers and Acquisitions result in numerous duplication of roles in the newly formed entity. This requires for relieving many employees from both the older entities. According to reputed research firms, there have been around 50,000 to 75,000 job losses directly. If the indirect jobs are considered that were dependent on the telecom sector, it would cross the 150,000 marks. However, it is not just Mergers and Acquisitions; automation is another huge reason for job cuts in this sector. As the technology is getting more and more advanced, the need for human interference is reducing significantly. It is expected that the shrink in the jobs in the telecom sector will be less in 2019 but will still be around 5-10%.

It should also be noted that most of the jobs that have been laid are from low-end contractual basis employees whereas the mid-level managerial level jobs are far more secure. Jio has been the largest employer out of all the players and in the upcoming days, the mobile phone, accessories and telecom equipment manufacturers will be employing a huge number of people.

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