Vodafone Idea Limited is now India’s largest telecom company with 408 million active users. This merger is the outcome of revenue pressure, churn that the telecom industry has been facing considering falling rates as a result of Reliance Jio’s aggressive launch and growth over last 2 years.
The merged entity has a new Board of Directors comprising 12 Directors (including 6 Independent Directors) constituted, with Mr. Kumar Mangalam Birla as the Chairman. The Board has appointed Mr. Balesh Sharma as the CEO.
The companies had announced their merger about a year back, however a new name, structure, and brand strategy has been a work in progress. A formal announcement was made last week by Idea Cellular about the merged entities name to Vodafone Idea Limited, after the National Company Law Tribunal (NCLT) approved the merger.
Considering the huge debt burden of both the companies of over Rs. 1,20,000 Cr, cost efficiencies would be of high relevance. One critical step to bring in cost efficiency in the merged scenario will be eliminating job redundancies.
Expected Job Losses
The process of streamlining of structures and head-counts has been underway since the merger was initially announced a year back. It had been anticipated that the merger would lead to job losses for over 5000 ( about 1/4th of the merged entity).
We may expect more job losses, in areas where clear duplication of role will be visible.
- Mid & Senior Level at HO Level
- Mid & Senior Level at Circle Level , once the operational synergy is established between the entities and their circle presence.
- Across levels for Finance, Procurement, Supply Chain, Sales
- Across levels for Marketing, ( depending on their new branding strategy, this may take time.)
These numbers however don’t include the indirect employees, and employees of partners and related businesses. The numbers will go up as these businesses further streamline their processes, eliminate redundancies, and put in place mechanisms to address cost pressures and work towards a profitable growth.