New Delhi: Reliance Industries Ltd (RIL) is looking to outplace around 400 employees from its fuel retailing business after it downscaled this business recently, according to at least two people familiar with the development, who did not wish to be identified.
The 400 are largely sales and marketing executives, although the number includes some finance executives, people manning oil pumps at retail stations, and employees of Reliance A1 Plaza, the retail-entertainment-dining establishments that are attached to the stations.
Friendly service: A Reliance petrol outlet in Hapur, Uttar Pradesh. The company has closed 900 of its 1,300 fuel stations. Of the 1,800 people it employed in the business, it has already moved 500 to its retail arm.
According to the first of the two people, the company identified these people as “surplus” at the end of June and plans to “outplace” them, or help them find other jobs in other companies by the end of September.
A spokesperson for Reliance denied that there was any such effort under way and claimed that people in the company’s petroleum retailing business would be placed in “other business operations” within the company.
Reliance is in businesses such as petrochemicals, refining and fuel retailing, and retail.
The 400 are from the 1,300 employees who are part of the fuel retail business, which Reliance has downscaled because the market is dominated by state-owned firms, which sell fuel at government mandated prices that are lower than the cost of production and which are compensated for this by the government.
Private firms such as Reliance are free to price their fuel, but cannot do so at levels higher than the ones at which the state-owned firms sell because this would mean a loss of business.
The company has closed around 900 of its 1,300 fuel stations.
The first person added that the employees the company is looking to outplace have experience between four years and 12 years, and earn between Rs4 lakh and Rs8 lakh a year.
Over the past three-four years, Reliance has hired around 1,800 people from consumer goods companies, banks and insurance firms for its fuel retailing business.
In 2007, when it became evident that the business would need to be downscaled, Reliance reduced the number of employees in this business by around 500 and placed them in Reliance Retail, the company’s retail arm.
“Since the staff mostly comprises sales and marketing professionals given that this a marketing organization, these employees easily found a fit with Reliance Retail,” said the first person. “But there is a limit to how many people they can add.”
The company is still trying to place some of the 400 in other businesses of RIL, including the polyester one. “Around 50- 60 employees have been already called for interviews (by this business). Hopefully, they will find jobs,” the person added.
RIL has also been looking to place at least some of the 400 in its offices across 19 states. It will pay the salaries of all 400 till September, the first person said.
Like many other Indian companies, RIL does not have an outplacement policy, but human resources (HR) consultants say it is good to have one in place.
“Through a formal outplacement service, companies saddled with extra people in a downturn can get rid of them without causing much heartburn,” said Ramesh Hande, director, InSync Consulting India Pvt. Ltd, an HR solution company that also offers outplacement services.
Typically, outplacement services can cost companies up to 15% of an employee’s salary. Still, the benefits far outweigh the cost.
“There are obvious cost benefits in the long run, which is why companies lay off employees in the first place,” Hande said.
“Apart from the cost advantage, outplacement assistance goes a long way in ensuring positivism in remaining employees, and boosting staff morale and employment branding,” he added.