Norwegian mobile operator Telenor will slash some 2,000 of the 17,500 jobs in India to cut costs, and scale down operations in four regions to reallocate resources to more profitable regions in the country. This is done amid uncertainty over the impact of the upcoming 2G spectrum auction.
India's Economic Times reported on Wednesday the layoffs account for over 11 percent of Telenor's total headcount in India. Out of the 2,000 affected, close to 400 are from Uninor--Telenor's joint venture with India's Unitech Group--while the remaining 1,600 are the company's independent local distributors, the report added, citing an unnamed company executive with direct knowledge of the development.
Amid uncertainty over the country's 2G spectrum auction, Telenor plans to trim its Indian workforce by scaling down GSM operations in four regions--Tamil Nadu, Kerala, Karnataka and Odisha. These are out of the 13 zones where it is commercially active, in order to reallocate resources to more profitable regions.
Tor Odland, vice president of group communications at Telenor, told Economic Times that Uninor has around 400 direct employees across Tamil Nadu, Kerala, Karnataka and Odisha. "As it gradually scales down in these circles, it will also evaluate possibilities of relocating some of the employees to other Uninor circles and also provide assistance in securing employment outside the company."
CEO Jon Fredrik Baksaas said in a separate report by Reuters the job cuts would make Uninor "self-financing, [meaning] cash-flow break-even, within the end of 2013". The previous business plan had set the target for first half of 2015, but was later brought forward by a year and a half, he added.
Analysts told Reuters that Telenor's restructuring was a sign the company plans to stay in India. It noted that Telenor had previously threatened to exit India after it lost its licenses, after an Indian court in February revoked all 122 license agreements granted to carriers in 2008 over allegations of fraud, and ordered a re-auction which has since been dogged by delays.