Telecom sector, which is one of the biggest employers in Indian Job industry is making shock waves for past few months. It provides 3lack jobs directly or indirectly jobs. As more and more mergers and acquisitions announced the sector is heading towards large consolidation phase. Since the introduction of Reliance Jio’s tariff war most of the existing players finding it hard to survive. The market which had 9 companies at a time may be reduced to 3 or 4 players. Airtel is buying Telenor, Vodafone and IDEA are merging, RCOM and Aircel are merging and many more are still on the cards.
Who will be impacted?
With the mergers and consolidation here comes risk of job loss as major purpose of these mergers is to reduce costs and curb losses. As most of the infrastructure is already setup the cost cutting will come mostly from job cuts. According to HR firms the cost of Salary and benefits for Telecom companies is upto 25% of total cost. With mergers this cost will definitely go low, as many layoffs possible since less no of people will be required to perform certain functions. Mid and lower level jobs such as BPO/customer care and support functions will have major impact.
Size of impact on Jobs
Telecom operators provide high no of indirect jobs than direct jobs through outsourcing support functions such as customer care and network management to other companies. Companies like Ericsson and Huwai have big contracts from these telecom operators for network management. These will not be impacted as infrastructure to be remained same. But there are outsourcing contracts to support functions, they may be impacted. This consolidation may lead to 10-15% job cuts & salary cuts to these lower level jobs. It maby upto 30000 job loss plus salary cuts, apart from low future hiring in sectors related to Telecom.
Last time such issue was happened in 2008 when Supreme court has cancelled license of operators in 2G case. So tighten your seat belts to face bumpy ride ahead.