Reliance Jio has reportedly cut down on its contractual employees and some permanent staff members as part of some internal cross cutting. According to ET Telecom report on Wednesday, Jio has taken this decision in order to reduce costs and improve operating margins, which fell in January-March quarter.

As reported by ET, the people familiar with the matter said Reliance Jio Infocomm has let go of some 5,000 staff members, out of which 500-600 were permanent employees and the rest were on contract-basis from third-party contractors. The telecom company, however, declined such thing and said “Jio continues to be a net recruiter in the industry” and “the question of a cost pressure-led action is not relevant.”

A Jio spokesperson statement noted, “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 we continue to recruit actively, the question of a cost pressure-led action is not relevant.”

Jio’s earnings margin reportedly fell 5 basis points for the January-March quarter, which is said to be 39 percent on quarter, with total expenses rising almost 8 percent on quarter, added report. The reason suggested is higher network operating costs, finance expenses, and depreciation and amortization charges.

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The report also cited undisclosed sources claiming Jio’s pay roll staff to be on a higher side with 15,000-20,000 employees. However, a large number of these workers reportedly are from the operator, which means third-party employees. The impact is said to be mostly in the customer acquisition segment, and the cut down reportedly started at least a quarter ago, and is expected to continue.

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