Bharti Airtel to cut 2,000 jobs

Bharti Airtel has embarked on a restructuring exercise that will merge three separate businesses, triggering a large-scale job cull for the first time in the services sector since the 2008 economic slowdown.

Under this exercise, Bharti Airtel plans to merge its mobile, satellite TV ( DTH), and fixed-line & broadband telemedia business, which jointly account for about 90% of the company's revenues and the vast majority of its workforce, into a single entity. 

The merger, ostensibly aimed at cutting costs and boosting efficiency at the country's biggest telecom operator at a time of falling profits, is expected to lead to big job losses, with estimates putting the number at more than 2,000. 

Bharti's move could provide the trigger for similar action at rivals, many of whom are battling identical issues-debt burden, slowing growth and high marketing spends amid cut-price tariffs. Several Bharti executives and others familiar with the company's plans told ET that managers had been told to cut positions in their teams and that the merger would create large-scale redundancies. 

"The estimate is that up to 25% of the 11,500 or so positions in the three verticals will be axed. The process has already started," said one company executive who has been asked to bring down the number of his direct reports. Another executive based out of Airtel's Delhi office said "the brunt of the merger will be felt across all levels", noting that each of the three business verticals has separate teams for sales, product, strategy, human resources and finance, all led by separate CEOs. 

A third employee said: "Employees were being sounded out about the restructuring, which on completion could impact 20-30% of Airtel's 16,830 employees in the country, including in its enterprise business." The enterprise arm is Bharti Airtel's fourth business division, serving corporates and small & medium businesses and also responsible for its undersea cable offerings. 

Bharti, in its response to specific queries sent by ET, confirmed the restructuring, but said it would have "minimal impact on people". "As and when any change is planned, the same will be done in the interest of all stakeholders and shared in an open and transparent manner." 

Co unlikely to go for mass sackings.