Credits -

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.

Jio reportedly lays off 5,000 employees to improve operating margins 1


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