India Cement employees to lose jobs after UltraTech acquisition? Chairman Srinivasan answers
Jul 31, 2024, 13:15 IST
Earlier this week, Aditya Birla Group’s UltraTech Cement announced acquiring a majority stake in India Cements. Just last month, UltraTech acquired a nearly 23% stake in the company, calling it a “non-controlling financial stake.” This was followed by the purchase of an additional 32.72% stake this month by UltraTech.
Mergers and acquisitions, while often touted as strategic moves to fuel business growth, frequently lead to job losses. The integration of two distinct corporate cultures and operations often results in overlapping roles and functions, and to reduce costs, companies often resort to layoffs. For instance, the merger of Disney and 21st Century Fox led to significant job cuts, as the combined entity sought to eliminate redundancies in areas like marketing, distribution, and technology.
Similar concerns echoed during the Adani’s take over of ACC and Ambuja Cement in 2023 as the new management shifted several key roles to Ahmedabad. So, it's natural for employees to get anxious when a competitor takes over the company as the new owner.
In this case, India Cement employees could also be feeling a sense of insecurity about their jobs. But there is no reason to feel so, if the company's management is to be believed. Recently, India Cements chairman N Srinivasan assured employees that there is no reason for them to be concerned about their jobs.
“The change to UltraTech from India Cements does not mean a change in your career. Because I have been personally assured, I just spoke to the Chairman of the Aditya Birla Group (Kumar Mangalam Birla) and he said that he will follow the same policy that we have followed so far and there will be space for everybody and good workers will be rewarded,” Srinivasan told employees according to a PTI report.
He also added that India Cements employees need not feel threatened or insecure as the future “was as solid as when he was the head of the plant.”
“You constitute the core of the cement business. You must work with full vigour, and that everything will be the same as before. The future is good," he said.
India Cement was founded in 1946 by SNN Sankaralinga Iyer and T S Narayanaswami. The company started off with two plants having a capacity of 1.3 million tonnes in 1989. Now, the company has a total capacity of 15.5 million tonnes per annum. It also has 8 integrated cement plants in various parts of the country including Tamil Nadu, Rajasthan, Telangana and Andhra Pradesh.
According to a report in MoneyControl, Srinivasan also elaborated on the reasons behind selling the company. He said that he and other members of the promoter group decided to sell their shares in the company to UltraTech Cement because of price wars, cost pressures, and problems selling some land, which made things harder for the company.
"We tried everything to cut costs and were counting on an investor to buy a large piece of our land, which would have solved many problems. But that didn't happen, so we went back to our earlier plan of selling the company," Srinivasan said.
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Mergers and acquisitions, while often touted as strategic moves to fuel business growth, frequently lead to job losses. The integration of two distinct corporate cultures and operations often results in overlapping roles and functions, and to reduce costs, companies often resort to layoffs. For instance, the merger of Disney and 21st Century Fox led to significant job cuts, as the combined entity sought to eliminate redundancies in areas like marketing, distribution, and technology.
Similar concerns echoed during the Adani’s take over of ACC and Ambuja Cement in 2023 as the new management shifted several key roles to Ahmedabad. So, it's natural for employees to get anxious when a competitor takes over the company as the new owner.
In this case, India Cement employees could also be feeling a sense of insecurity about their jobs. But there is no reason to feel so, if the company's management is to be believed. Recently, India Cements chairman N Srinivasan assured employees that there is no reason for them to be concerned about their jobs.
“The change to UltraTech from India Cements does not mean a change in your career. Because I have been personally assured, I just spoke to the Chairman of the Aditya Birla Group (Kumar Mangalam Birla) and he said that he will follow the same policy that we have followed so far and there will be space for everybody and good workers will be rewarded,” Srinivasan told employees according to a PTI report.
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“You constitute the core of the cement business. You must work with full vigour, and that everything will be the same as before. The future is good," he said.
India Cement was founded in 1946 by SNN Sankaralinga Iyer and T S Narayanaswami. The company started off with two plants having a capacity of 1.3 million tonnes in 1989. Now, the company has a total capacity of 15.5 million tonnes per annum. It also has 8 integrated cement plants in various parts of the country including Tamil Nadu, Rajasthan, Telangana and Andhra Pradesh.
According to a report in MoneyControl, Srinivasan also elaborated on the reasons behind selling the company. He said that he and other members of the promoter group decided to sell their shares in the company to UltraTech Cement because of price wars, cost pressures, and problems selling some land, which made things harder for the company.
"We tried everything to cut costs and were counting on an investor to buy a large piece of our land, which would have solved many problems. But that didn't happen, so we went back to our earlier plan of selling the company," Srinivasan said.
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Meanwhile, UltraTech Cement announced on Monday that it does not plan to remove India Cements' shares from the stock market after buying the additional shares. Following the news, the stock of India Cements dipped by 0.51% to trade at Rs 367.20, while UltraTech's stock jumped by 0.69% to trade at 11,888.05 points during the day.