In another jolt to the employment sector, Tata Teleservices has sacked around 600 employees citing stress on the telecom sector as the reason. Sales and other departments accounted for the maximum layoff.
“What most of the operators including Tata Telservices are doing is workforce rationalisation, to stay competitive in line with the needs of the market. The company is offering one month of salary for every year of work to the sacked employees,” reported Press Trust of India.
The layoff comes at a time when the telecom sector is facing revenue crunch as the tariff war has intensified with Reliance Jio entering the market last year.
The sacking has been carried out in different departments of the company and Tata hasn’t come up with an official statement. News reports early in the year suggested Tata Teleservices to be merged with Anil Ambani led Reliance Communications. Tata Teleservices is a part of the Tata Group in the telecom sector. It’s listed arm Tata Teleservices (Maharashtra) Ltd provides GSM, CDMA and 3G services through wireline and wireless services across 19 cities in India.
The telecom sector is facing revenue crunch and loss of operating margin as the marketing positioning of Jio with lower tariff rates has affected market share of every other telecom company with the debt on sector expected to rise to more than Rs 4.5 trillion in FY17.
The ruckus in the telecom industry has forced giants Vodafone and Idea to merge to gain market share to compete. Airtel also has acquired a much smaller company Telenor to widen its consumer base and compete in the market.
As per data from the Telecom Regulatory Authority of India, Tata’s subscriber base stands at 4.4 per cent. It was 51.2 million at the end of February 2017 out of the total 1.16 billion customers in India. Tata Teleservices’ consumer base fell by 300,000 in the quarter ended March 2016.
BW Reporters
The author is a correspondent with BW Businessworld with keen interest in HR and employee welfare.
