RCom to cut 37% of workforce by month-end

In a cost-cutting measure, telecom operator Reliance Communications will slash 37% of its workforce and outsource its call centre and shared services operations.

The telco is restructuring its 15,000 strong workforce with an aim to exit non-core businesses and cut costs to boost profitability.

“Nearly 4,500 of them are currently involved in RCOM's call centre operations while the rest make up its shared services teams. After the outsourcing deals are finalized, these 6,000-odd employees will migrate to the rolls of the two third-party service providers, which will lower the telco’s employee count to well under 10,000," media reports said quoting a top company official. He declined to name the two companies on "confidentiality grounds".

"The BPO and shared services businesses were highly inefficient and not adding any value to RCom's bottom line, which is why we decided to outsource them and purely focus on core telco issues like customer acquisitions, sales, marketing and brand building to create a leaner organization that is more cost-efficient," the official
said.

The outsourcing will save around Rs 200 crore, which goes as salaries of the staff.

The attempt to cut staff costs – Rs 307.3 crore in the January-March quarter, up from Rs 250.8 crore in the previous one and Rs 213 crore a year ago – is aimed at complementing sales efforts. These will be the second wave of RCom's outsourcing deals.

Last year, the telco entered into a total $2 bn of deals with Sweden's Ericsson and France's Alcatel-Lucent to outsource its pan-India network management operations to optimize resources and cut costs.