April 16: Heeding to an advice from the merger-handling nodal team, Vodafone and Idea Cellular are planning to bring down the employee count to about three-fourth of their collective headcount. Both the companies are now planning to shed at least 5000 employees in a bid to save on costs and improve efficiency.
The companies collectively has a debt of around Rs 1,20,000 crore and is also making losses amid huge revenue pressure in the industry. It is on this background that the companies were advised to cut short the headcount so as to ease the pressure in starting new operations. Additionally, it would also help the merged entity eliminate duplication according to sources.
Reports said that Vodafone and Idea are expected to begin the process for employee count reduction soon, as the nodal team has advised to bring down the count within a period of two months. According to the report from The Economic Times, the companies will put the axe over those employees who fall into the bottom quartile in performance assessment during the appraisal season.
Similar job profiles will also be trimmed down in a bid to cut short the count, which could hit departments like supply chain and procurement. Experts also suggest that the biggest reduction will be on account of duplication elimination, adding that the bulky duplication of departments might cause the numbers to soar over 5000. The two companies have a collective count of over 21000 employees.
A Vodafone spokesperson has though dismissed the speculation, adding the final merger approvals were yet to be received. “The two companies have not received final merger approvals and so the leadership teams of Vodafone and Idea continue to compete in the market and manage their businesses separately. No decisions have been taken about the workforce of the merged entity, although it is fair to assume that employees will benefit from the opportunities that arise from working for a significantly larger operation,” the spokesperson was quoted as saying by news reports.
Idea and Vodafone merger is expected to get winded up by May this year, though Department of Telecom has put forward hurdles in the form of due repayment for each entities. With 42% customer market share and 37% revenue market share, the merged entity will be the largest mobile phone operator in India replacing the current leader Bharti Airtel.