"These are complicated deals. They don't close overnight. We will not leave our people in the lurch as we have to run the business for next several quarters," said a person with knowledge of the matter
The fate of over 3,800 employees of GlaxoSmithKline Consumer Healthcare India (GSKCH) hangs in the balance after the company merged with Hindustan Unilever Limited (HUL) in deal valued at $3.8 billion early this week.
Moneycontrol learned from sources that there wouldn't be any rationalisation immediately at GSKCH as the deal may take at least four quarters to get all approvals.
"These are complicated deals. They don't close overnight. We will not leave our people in the lurch, as we have to run the business for next several quarters," said a person with knowledge of the matter.
"When two companies come together, they will of course discuss about human resources, if you see the portfolio of HUL, they are not there in the healthcare drinks. And therefore they don't have the expertise. It's a complete virgin territory for them. For them to understand and have people expertise will be very critical. Am I saying that they will take all of us, the answer is no," said the person quoted above.
Another source within GSKCH said while there may not be too many job cuts in manufacturing, employees in other support functions that have significant overlap may get impacted.
"There is concern among employees, despite assurances of no immediate job cuts," the source said.
Media reports quoted David Redfern, Chief Strategy Officer of GSK, saying that there is no clause in the deal for HUL to retain all GSKCH employees.
HUL declined to comment for the story. An email sent to GSK remained unanswered at the time of publishing this article.
Staffing agencies say whenever such large mergers and acquisitions happen, it is inevitable that some people will lose jobs due to duplicity of functions.
Kamal Karanth, Co-Founder of staffing firm Xpheno, said GSK has a weaker presence in north and east, so there the overlap will be limited and so will be the impact on sales.
“The roles that will be under scrutiny would be more functional in nature. HR, IT, Procurement, real estate optimisation, sales and marketing is the bread and butter, minimal disruption at mid-managerial and bottom of the pyramid would be expected as they carry the relationships with customers. In large mergers like these, the senior roles at CXO levels will see severance packages doled out like it happened at Vodafone-Idea merger,” he added.
Rituparna Chakraborty, Executive Vice President, TeamLease Services, said mergers look at the ability to garner the merit of rationalisation of common resources. “But whenever there is a consolidation, this is inevitable. It differs from one company to the other, but it can be avoided if a company takes a long-term view of future expansion."
Separation can be humane
Aditya Narayan Mishra, CEO, CIEL HR Services, says while the separation is inevitable, it can be done in a humane and transparent manner.
“Companies holding the kind of reputation that they hold, I expect them to decide fast, communicate clearly and offer a separation process that’s not only humane but also reduces the impact of job loss on the specific individuals. This process includes not only financial packages but also emotional support, professional assistance to help the individual find alternate work,” Mishra added.
A senior human resource professional whose organisation works with FMCG firms said the actual numbers could be much higher once the actual merger is completed. “While for senior level roles that will get redundant, the company could offer an outplacement service, for junior roles it may not be feasible from a cost perspective,” he added. In a few organisations, he explained that senior HR heads would give advance to those employees so that they start looking out. Here, he said the company did not do it because it would have caused unnecessary panic.
Another issue is that for entry-level roles, the number of years of experience is also low. So, companies are also unable to make written provisions for them for retention in case of unwarranted business situations that may make their role redundant.Sunil Goel, Managing Director, GlobalHunt, said in cases of mergers like these, when there is product integration in a merger, the sales and marketing jobs get impacted the most. “If an employee completes at least five years in service, the organisation can either look at redeploying them to other roles within the company or even help them find a job,” he added.