The merger of Vodafone and Idea may ease out financial stress on the management of both the companies, but will put thousands of employees under the axe. According to sources at ET, more than 5,000 employees could lose their jobs if the merger of Vodafone and Idea is through all the regulatory approvals.
The proposed merger of Vodafone India and Idea Cellular has already been approved by most of the regulatory bodies except telecom department – which doesn’t look like much of a hurdle at this point in time. Little over 21,000 people are employed by both the companies combined and the merger will affect the most who would find themselves at the bottom in the performance assessment during the appraisal due in May.
Both, Vodafone India and Idea Cellular, are struggling with the mounting debt and rising competition. Both the companies are staring at a combined debt of nearly $18.46 billion.
Vodafone Idea Merger: The Survival of The Fittest
While Idea Cellular has denied commenting on the situation, Vodafone has outrightly rejected the claim stating that the merger is is to be concluded and till the management is not evaluating any such strategy.
On the contrary, employees at both of the companies are already exploring the options outside. A person familiar with the situation told us that the fight for the survival of the fittest has already started as most of the mid-level and senior positions are claimed by both sides of the executives. Post-merger, Vodafone and Idea will have to avoid duplication to optimise their revenue books and any ambiguity.
On the other hand, Bharti Airtel and Reliance Jio have set their eyes on some of the performing employees Vodafone-Idea may have to let go as a result of the possible merger. However, the consolidation of the industry due to the advent of Reliance Jio have left employees few very few options to juggle with. Analysts believe that this may also result in a large number of people pivoting their career or settling down with comparatively lesses pay package they used to enjoy before.
The tug-of-war between the employees of Vodafone and Idea has begun. However, analysts believe that as compared to Vodafone, number of employees of Idea Cellular are on the edge. Vodafone is the second largest telecom provider in India with 18.56% market share, followed by Idea that accounted for 17.16% market as of January 31, 2018.
This could be a challenging time frame for all those telecom employees who lose their jobs as a result of Vodone Idea merger. The only thing at this stage could change the equation is dues that DoT has asked Vodafone and Idea to settle before the approval. There is nearly $3 billion pending in relation to licensing fees, spectrum allocation, and spectrum usage charges Vodafone and Idea needs to clear.