Jio reportedly lays off 5,000 employees to improve operating margins


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Indian telecommunications giant Reliance Jio has reportedly fired thousands of its employees as a part of company’s cost-cut measure and to improve operating margins. The company has laid off more than 5000 employees including contracted employees as well as 10% of the permanent staff to enhance its operating margins, which witnessed a downfall in the January-March quarter.

The employees from departments like human resources, supply chain, administration, finance, and networks have suffered. The Mukesh Ambani-led firm has not witnessed any growth in its operating margins in the last two years. Currently, the firm employees over 20,000 people including a significant number from third-party workforce providers.

In the fourth quarter of FY18-19, Reliance Jio witnessed a downfall in its Average Revenue Per User (ARPU) to INR 126.2 from INR 131.7 in the previous quarter. The firm’s EBITDA went down 5 basis points to 39% with total expenses rising by 8%. The reasons cited for changes in the above metrics include higher network operating costs, financial expenses as well as depreciation.

Reliance Jio’s mobile subscriber base stands at 306.7 million with a 26% market share in userbase and 31% market share in revenues. While most of the media firms confirm the report, Reliance Jio, on the other hand, said that there are no cost-cut requirements to lay off employees. According to several analysts, Jio’s aggressive pricing strategy to offer cheap data has led to this impact.

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