Consolidation could lead to huge job losses in the telecom sector

Priyanka Pani Mumbai | Updated on January 13, 2018

Telecom operators are not big recruiters, but the industry creates a lot ofindirect jobs

Major impact will be at mid, lower level; to affect nearly 30% of employees: experts

The ongoing consolidation in the telecom industry could lead to massive job losses in 6-12 months, according to experts. The sector, which at one time had 8-9 players, is now moving to a situation where the market will be left with only 3-4 operators.

Sumit Sabharwal, CEO (Managed Services) and Managing Director (SAARC), Excelity Globa, a HR outsourcing service provider, said that for telecom companies the SIB (Salary, Incentives and Benefits) cost is about about 40-43 per cent and this will come under pressure with the merger of two big telecom giants Vodafone and Idea. Companies will either have to lay off or retain and re-train their talent at the top level. However, the major impact will be at the mid and lower level (which is mostly the call centres, BPOs, and other support functions that employ about 1.5 lakh people), with about 30 per cent of the employees getting pink slips.

“Lower management will face the maximum heat as there will be a lot of overlap in the last-mile service delivery, customer interaction and point of sales,” Sabharwal added.

Telecom operators are not big recruiters directly. The country’s largest operator manages over 250 million users with just 19,000 employees. But the industry creates a lot of indirect jobs as it outsources functions like customer care and network management. Maanendra Singh , Managing Partner at Antal International, a recruitment company, said the consolidation will lead to 10-15 per cent job cuts in the lower level that forms about 60 per cent of the total employees in the industry.

The last time the telecom sector witnesses such massive lay-off was when the Supreme Court cancelled licences of all mobile operators which got 2G licences in 2008. As the fresh round of consolidation happens, operators are expected to streamline operations and functions.

Sudeep Sen, Assintant VP, Teamlease Services, said the silver lining is that telecom penetration is still low which means that going forward telecom operators will need staff for the next phase of growth. “In my opinion, the consolidation will not have a major impact from the employability aspect in the long term, but yes the volume of hiring will come down by 12-15 per cent for the next 12-24 months at least,” he said.

Published on February 24, 2017

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