Vodafone Idea heading from bad to worse: Lost 35% of employees in last 4 years, 1 million subscribers in last one year

Troubles for Vodafone Idea are far from over as the telecom company has lost over 35% of their employees in the last 4 years. Vodafone Idea subscribers count is on a constant downwards trajectory, and the figures paint quite a worrisome picture and raise a lot of questions about future existence

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Ever since the launch of Reliance Jio in India, the existing telecom operators have begun to feel the heat. Vodafone and Idea (prior to the merger) were the two worst-hit telecom companies. Therefore, in order to maintain their competitiveness in the market, both businesses decided to merge. However, even after the merger, the troubles for Vodafone Idea seem far from over as it continues to lose subscribers to Jio and Airtel. Additionally, the telecom company has experienced a sharp employee churn in the last few years, making things worse for them.

By the end of July, 2022, Vodafone Idea have had 122.97 million wireless subscribers in India, down from 123.97 million during a year-ago period. That’s a one-million-subscriber drop in just one year.

But the most notable development is the sharp decline in headcounts. The number of permanent employees of Vodafone Idea declined a 35.2% in the last four years, indicating that employees are losing faith in the telecom company. As of March 31, 2022, there were 8,760 permanent employees on Vodafone India’s payroll, a 4.5% YoY decline. Surprisingly, in FY19, Vodafone Idea reported a staggering 36.8% YoY growth in the number of permanent employees on the rolls, totalling 13,520. However, this sudden growth in VI employee count in FY19 was mainly due to the merger.

The employee churn happens at every company but for Vodafone Idea it is a key parameter as the company is already struggling with a weak financial position, a Mumbai-based analyst said

Due to the fast decreasing employee count, the company’s consolidated employee cost, including salaries, allowances, and other benefits, dropped from Rs 2,294 crore in FY19 to Rs 1,735 crore in FY22, a decrease of over 24%.

Employee benefit expenses also decreased by Rs 2,949 million, from Rs 20,300 million in FY2021 to Rs 17,351 million in FY2022, primarily due to a decline in headcount.

On the other hand, Bharti Airtel, the second-largest telecom company in India, continues to grow its subscriber base, permanent employee base, employee spending, etc. By the end of March 2022, Bharti Airtel had 10,142 permanent employees, up from 9,691 during the same time last year.

Telecom Inustry in India

The telecom industry in India has become extremely competitive after Reliance Jio changed the whole market equation by launching plans with unlimited free calling at jaw-dropping price. Many small telecom players failed to compete and ended up either merging or shutting down operations. There were more than 12 major telecom players who were competing with each other for a sizeable pie of the market when Jio debutd the market in 2015. Fast forward, 2022, India now has only four major telecom players – Reliance Jio, Airtel, Vodafine Idea and BSNL – that have survived the the great telecom revolution in India.

The speed of consolidation and the intense level of competition in the last 5 years could be well understood from the fast changing landscape. Within just 7 years of existence Jio ahs not only leapfrogged all other telecom players, but also dethroned Airtel by attracting more than 29 lakh subscribers.

Besides Airtel, and the government-backed BSNL, Vodafone Idea – the merged entity of Vodafone and Idea – has survived. However, the figures paint quite a worrisome picture and raise a lot of questions about future existence. India has just embarked upon the 5G revolution, and it would be interesting to see if Vodafone could turn the table by leveraging it.

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