India’s telecom giant Reliance Jio cuts contractual staff

• Reliance Jio is reportedly reducing its contractual and permanent staff.
  
• The telecom major has asked nearly 5,000 employees to leave the company — including over 500 from the permanent staff.
  
• The lay off is due to the falling operational margins of the company, according to an ET report.
  
• In the telecom industry, the employee cost ranges from 5%-6% of the total operational cost.

While the Mukesh Ambani-led Telecom giant Reliance Jio has been growing its customer base aggressively, the company has reportedly trimmed its contractual staff significantly.

Owing to the falling operational margins, the homegrown giant has also reduced the headcount for permanent employees. The telecom major has reportedly rolled out leave orders for nearly 5,000 employees — including over 500 permanent ones.

Commenting on the move, the company reportedly said that Jio continues to be a net recruiter and there was no question of any "cost pressure-led action."

Jio’s operational margin projected a decline in the January to March quarter while the expenses increased further by 8%, thereby affecting the workforce largely.

Jio has an employee base of over 15,000 under its payroll. However, a large part of the workforce includes third-party workers, which are on the payroll of staffing firms.

"We are expanding our consumer businesses and Jio continues to be a net recruiter in the industry. We also work with contractors who may be hiring staff on fixed time contracts for our various project construction activities. Given that we continue to recruit actively, the question of a cost pressure-led action is not relevant,” ET reported citing company officials.

For the telecom industry, the employee cost usually ranges from 5%-6%, which has been the first target for the company bringing a cost-cutting functionality in place.

While the move has impacted the consumer acquisition vertical the most, the redundancy has affected the company staff across verticals — HR, finance, networking and administration.

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