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Hikes at Vodafone Idea a sign of green shoots

Employees at loss-making telco get average 9% raise, bonus of 97% across levels.

, ET Bureau|
Updated: Jul 17, 2019, 11.07 AM IST
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It has brought cheer to staff that has been facing immense uncertainty and got no hikes since June 2017.
MUMBAI: In the first signs of a turnaround at loss-making Vodafone Idea, India’s largest telco by subscribers has given its 10,000-odd employees an average raise of 9% and a bonus payout of 97% across levels.

It has brought cheer to staff that has been facing immense uncertainty and got no hikes since June 2017.

The telco’s average increment is slightly better than that at rival Bharti Airtel, whose 16,000 employees got an average raise of 7.5% in June. But Airtel’s variable payout was 100%, and unlike the erstwhile Vodafone India and Idea Cellular, both of which had not raised salaries last year, it had given a 7.5% average increment in 2018 too. Financial pressures forced Vodafone and Idea to merge in August 2018.

Mukesh Ambani-led Reliance Jio Infocomm, whose entry back in September 2016 had upended the market and pushed Vodafone India, Idea and Bharti Airtel’s India operations into the red, has rolled out average variable of 90% for its 15,000-20,000 employees, with hikes due in August.

None of the three companies responded to ET’s queries.

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The industry has had to let go of one lakh employees since it went into consolidation mode, which saw the market shrink from eight private players to three. But with revenues stabilising, HR experts expect manpower to increase by 5% by the end of March 2020.

“The worst is getting over; after consolidation and better results, operators would like to retain their people. During the bad times, they had right-sized their organisations and would now like to keep their best resources,” said Bharat Bhargava, partner, telecom advisory services, EY. “They would also like to attract the right talent pool as telcos become digital service providers.”

A person aware of the development said the best have got a 17% raise at Vodafone Idea. “The variable pay (read: bonus) is a flat 97% and the company has also ensured that the hike amount comes as arrears calculated from January, instead of June,” he said.

Since announcing their merger in early 2017, Vodafone India and Idea had brought in severe cost-cutting measures that included a hiring freeze, layoffs and no promotions or increments. The merged entity had manpower of around 17,000, down from a combined 22,000-plus pre-merger. It has continued to see steady exits of executives, both voluntary and involuntary – reducing employee strength to around 10,000 now.

But with operational synergies kicking in during January-March, the outlook has improved.
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