Troubled Vodafone Idea has laid off 1\,500 people\, says report
Troubled telecom company Vodafone Idea has laid off as many as 1,500 people, ET Telecom has reported.
The new development is part of a series of drastic cost-cutting measures, and closely follows the telco's recent move to reduce the number of its circles to 10 from 22, with the aim of operational consolidation and cost rationalisation.
The telco had told the Supreme Court in June that it did not have money to pay salaries.
At the time of the merger, the total number of Vodafone and Idea employees was 20,000. Before the circle rejig, Voda Idea had 11,705 permanent employees on its rolls. Since the rejig, the telco is believed to have asked anywhere between 1,200 and 1,500 of them across various levels to leave, the report said.
Retrenchments are still going on to "remove any flab", and the laid-off employees are being given severance pays, insiders said. As per ET Telecom's report, for some of the senior roles, the severance amount has been around seven months of salary subject to exit clauses in their contracts.
The junior- and mid-level people that have been laid off are being given severance amounts based on years of work with the company, the report said quoting a person who was told to go.
According to industry estimates, the cash-strapped company owes vendors Rs 3,500 crore to Rs 4,000 crore cumulatively for equipment supplies. As of now, vendors have been delaying taking new orders from the telco for fear that payments may never be made for the same, the report said.
Vodafone Idea's vendors include Nokia, Ericsson, Huawei, and ZTE, among others. The delay in taking orders by them is compounding the company's problems even as it struggles to stay alive amid an increasingly hostile business environment.
This has led to the telco's expansion plans being stalled, deepening the risk of more subscriber losses, the report said. The telco, a JV between Aditya Birla Group and Vodafone Group Plc, has lost 2 crore subscribers to rivals in the two quarters to March 2020.
It reported a staggering Rs 73,878 crore net loss in FY 20, the highest ever by any Indian firm. According to insiders, the company may have lost 1.5 crore subscribers more for the quarter ended June 30.