With the merger process of telecom giants Vodafone India and Idea Cellular proceeding towards the final stage, speculations are that the companies are planning to lay off huge number of employees. A report in Economic Times claimed that at least 5,000 people could lose their jobs due to the merger.
Quoting a top official close to the development, the report said that both Vodafone and Idea do not want the new operations to start under pressure of excess manpower. Both Vodafone and Idea currently have over 10,000 employees each.
While Aditya Birla Group, which owns the brand Idea, declined to comment on the retrenchment report, a Vodafone spokesperson described it a 'pure speculation', the report said.
“This is pure speculation and totally untrue. The two companies have not received final merger approvals and so the leadership teams of Vodafone and Idea continue to compete in the market and manage their businesses separately. No decisions have been taken about the workforce of the merged entity," the newspaper quoted the spokesperson, as saying.
Meanwhile, the Department of Telecom is waiting for the DIPP to raise foreign direct investment limit in Idea Cellular Ltd. to 100 per cent, before approving its merger with Vodafone India, as per official sources.
“Only FDI clearance for Idea is pending before the proposed merger with Vodafone (India) can go through. FDI limit needs to be raised for both the deals -- sale of the tower business to ATC and the Vodafone merger,” a government official told PTI.
Vodafone India and Idea Cellular had last year agreed to merge their operations to create the country's largest telecom operator worth of more than US dollar 23 billion with a 35 per cent market share.