Moneycontrol NewsThe onset of Reliance Jio and its freebies has rattled the telecom space and other incumbents are looking at consolidation to survive and gain competitive advantage.
News of mergers between Airtel-Telenor, Vodafone-Idea, Reliance Communication-Aircel are already doing the rounds.
On one hand, these mergers could help bigger incumbents increase their subscriber base, provide competitive pricing but on the other hand, this is also likely to wipe off 10-15 percent of jobs in the telecom space and most likely from the sales, distribution and infrastructure services space, reports an article in Business Standard.
The mergers are also likely to help the companies save on manpower costs, capex, ad spends.
However, telecom sector experts think these merges are going to face lot of regulatory and operational challenges and so the full impact will not be known for some time.
“One of seven jobs in the sector is under threat. Most impacted will be jobs connected with sales and distribution and those in the infrastructure services space,” said the head of an executive search firm to Business Standard. The executive is also is advising one of the large players on the HR front.
According to India Ratings and Research the job cuts are likely to play out only over the next two years. The hiring sentiment in the sector will also take a hit. The employee salaries are around 4-5 percent of the sales revenues of most big players in the sector, says the India Ratings.
Meanwhile, Human Resources (HR) experts believe that consolidation in the space would have a ripple effect for the whole sector and the related spaces because the ratio of direct to indirect jobs in the sector is around 1:4.
While some analyst suggest that job cuts are likely in telecom space others have suggest exiting the stocks.
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