New Delhi: Reliance Communications, India’s second-largest mobile phone carrier by subscribers, will restructure its wireless business over the next 30 days, a move that a source with knowledge of the matter said could slash 700 jobs.
The debt-laden company, controlled by billionaire Anil Ambani, has reported eight straight quarters of profit drops and is betting on the sale of its telecom tower business to cut its more than $7 billion net debt.
Reliance said in a statement on Monday it would discontinue with its current structure with three regional heads, and would name a new chief operating officer, and create a “leaner and flatter” structure, but declined to comment on possible job losses.
A source with knowledge of the development said the new structure would lead to reduction of a tenth of the wireless business’s about 7,000 employees.
“As far as cost reduction is considered, it’s positive for the company,” said K. K. Mital, head of portfolio management at Globe Capital in New Delhi.
“But there are other issues as well,” he said referring to Reliance Comm’s heavy debt and operational performance that has lagged major rivals.
Bigger rival Bharti Airtel restructured its operations in India and South Asia effective 1 August to improve efficiency.
Reliance Communications shares were trading 2.9% up at Rs87.15 by 02:00 pm, having risen as much as 4% in a subdued Mumbai market.
The stock, however, is down about 40% this year, underperforming the benchmark BSE index that has fallen just over 18%.