Reliance Communications Leaves 3,000 Employees Out in the Cold
Within a fortnight, once telecom giant Reliance Communications (RCom), headquartered in Navi Mumbai, will shut shop. Well, most of it.
Riddled with debt to the tune of Rs 44,300 crore and defeated by the price war triggered by brother Mukesh Ambani’s Jio business, the Anil Ambani-owned company plans to shut down its 2G and 3G wireless operations and voice call services come 30 November.
Moving forward, RCom will operate as an Mobile Virtual Network Organiser (MVNO) offering only 4G services and focussing more on its Business-to-Business segment. An MVNO doesn’t have its own licensed spectrum or network. Instead, it buys minutes from other telecom companies and sells them under its brand using their network.
These drastic moves are a part of its Strategic Debt Restructuring pact with its lenders, which gives it time until December 2018 to pay off its debt, but only until December 2017 to significantly reduce it, failing which the lenders take over the company’s and its subsidiaries’ management entirely.
At a RCom town hall in October, Executive Director Gurdeep Singh is learnt to have said that the company had “reached a situation where [they needed] to call it a day…” The company reported its third quarterly loss in month in September worth Rs 2,709 crore.
The company informed its workforce in the last week of October that 30 November will be their last date of employment. Considering that aren’t too many alternatives in the job market, that put them in a spot.
The Human Cost
Ashok Kumar Nagraj, a District General Manager in the Karnataka circle, estimates that no less than 2,500-3,000 people have lost their jobs in this process. Losing a job is always stressful, but it is the mismanagement by RCom that is giving Nagraj and thousands of other employees sleepless nights. A petition with over 2,500 signatures and a social media campaign titled #SaveRComEmployees has also been pushed by the employees to voice their serious complaints against the company.
"For Personal Reasons"
I got a call from the local HR on 24 October. I was asked to put in my papers within 24 hours. On top of that, I was asked to write that I was resigning for “personal reasons”. But it wasn’t just me. The entire cluster had been asked to do the same; we weren’t given any other information or options. So, we did.Ashok Kumar Nagraj
This is Ashok’s second stint with RCom. He had earlier worker with the company between 2008 and 15, and recently rejoined it in February this year. The only wage-earner in his family of four, he is worried about what lies in store for him. “If the company had to shut down at all, there is a way to do it. We would all been okay if due process was followed. There was no mention of a settlement or a termination package. We were told we will get our November salary and other outstanding dues as our Full and Final settlement (F&F) in mid-January 2018. I haven’t even received my October salary yet. Everyone at home is always stressed and depressed.”
Kuldeep Yadav, a Territory Sales Manager (TSM) in Satna, Chattisgarh, is also the only earning member amidst his wife, three sisters, mother, grandfather and mentally handicapped father. His area got the same information from the top on 24 October, but with a tighter lip. They were simply asked to resign by 30 November or be terminated, but Kuldeep was one of the few who didn’t.
After speaking to several employees from across various clusters, a patten emerged. Thousands of employees who was losing their job across RCom’s pan-India wireless operations have been asked to resign “for personal reasons”.
Abhishek Kumar, a Cluster Head at RCom, was informed by HR to relay to his cluster that they all had to put down their papers within the week, by 30 October, a full month before the final date, or they would be terminated. “It’s because either way, they don’t have to pay us a compensation amount.” He estimates that had the company decided to follow due process and pay a settlement amount to all outgoing employees, it wouldn’t have cost the company more than Rs 100 crore, which at RCom’s scale is a drop in the ocean. Abhishek estimated that barring three to four people, the entire MP cluster had resigned within the week.
There has been no increment for us for the last two years. We got it for one year before that but before that for three years we got no increment. I’ve worked here for six years now. I left Airtel and came here. There, no matter what happened, on 1 June all employees would get an appraisal based on their performance.Abhishek Kumar
There is also uncertainty regarding outgoing employees’ PF accounts, where in some cases, it’s split between two accounts (from when RCom Ltd became RCom Infrastructure Ltd) while in other cases, the company is yet to deposit the full PF amount into employee accounts. In all interviews, employees claimed that RCom had not provided a grievance redressal system or space where they could clear their confusions about the leaving process.
By 5 November, most RCOm wireless employees had given in and resigned. Those who didn’t – only a few hundred – said they had some hope since there were so many gaps in communication and variations in directions from top.
Transfers to Nowhere
The morning of 15 November, when this story was about to be published, The Quint received a call from Kuldeep. Late in the evening of 14 November, he and others who hadn’t resigned were sent transfer letters signed by Shantanu Bhattacharya, HR Head. The Quint could confirm that erring employees in at least Delhi, Chattisgarh, Uttar Pradesh and MP circles, have received such letters.
Kuldeep was, for instance, transferred from Satna, Chattisgarh to Nagercoil in Tamil Nadu, on the same pay and post.
He has been asked to report within the week by 21 November, failing which RCom has grounds to terminate him. The mystery is, even the Nagercoil office is shutting (since RCom’s pan-India wireless operations are shutting as per notice given to TRAI). When he contacted Ashok Kumar Kallambella, the HR official he was to report to, it turned out the latter had no information on any transfers and happened to be working in Bangalore at the moment.
Sagar Anijwal, a TSM in Ratlam for the last three years, has been posted to Jammu and Kashmir. He didn’t resign because he didn’t want to let go of the only job he could see on the horizon and until yesterday, termination seemed to be an empty threat. “Where will I go after resigning? So I didn’t. And now I have to move to Kashmir within a week. I have no choice. It’s either this transfer or losing the job and giving them a reason to not pay me what I deserve,” he said.
When asked whether he knew if the J&K circle will still be operating, he confessed he was simply praying it would, regardless of the public announcement made by the company that 30 November would be the last day of operations. He received the same response when he tried to reach out to his new HR point of contact. The latter had no information about the developments at all.
The Quint tried to reach out to RCom’s management for a response to these claims through their headquarters’ official contact number, but received no response. A detailed email query was sent to them on Tuesday which remains unanswered. This story will be updated if and when we receive a response.
A few questions from the email:
- 1. Why have employees who hadn’t resigned by 14 November received transfer letters to other RCom offices on the same post, when as per TRAI, RCom is shutting down its 2G, 3G wireless and voice call services across India?
- 2. Why are employees being asked to resign “for personal reasons” instead of a settlement process standard to layoffs in the industry?
- 3. What is the payment schedule to clear outstanding dues for RCom’s retailers and channel partners, and how much does it totally amount to?
- 4. Approximately how many people are set to lose their jobs due to this closure?
- 5. Has RCom set up systems through which outgoing employees can share grievances with the management and get aid with procedures such as claiming their PF, etc?
- 6. What is the status of the company’s GST formalities? Have distributors been given account statements to submit at their end?
Pending Dues to Distributors and Retailers
It isn’t just the employees who feel short-changed. Since they are the front-end of the company, many relayed how dues worth crores still had to be cleared by RCom with its vast retailer and distributor network across India. Only as recently as the evening of 13 November did a message go out to all distributors that their dues will be cleared out in instalments through January to June 2018.
“There was no clarity on distributor claims until yesterday. We are the ones who have to face them and pick their calls up all day. Even now we have no information about retailers’ dues. Their TDS has also not been deposited by RCom since February ”, says Kuldeep.
‘RCom Is a GST Defaulter’: Employees
Besides this, at least five employees claimed that RCom was yet to finish its GST formalities.
The company had in June 2017 requested a three-year-moratorium on the new taxation system and a discount in license fee, taxes and spectrum usage charges for telecom companies. These requests were denied, and the GST was set at 18% as opposed to the previous 15% companies were charged in the form of taxes and cess on phone bills.
Currently, the government is owed more than Rs 750,000 crore by the industry. Many customers who are now switching to other networks are unable to receive port out codes from RCom’s side, while the company has also reportedly shut down a few of its mobile towers already. According to a report in Dainik Jagran, on 28 October, 22 lakh consumers in UP abruptly lost signal on their phones without any prior information.
The Dwindling Job Market
Ever since 24 October, employees have started looking for other jobs and sending their CVs in, only to face a unforgiving job market in the telecom industry. Most applicants have faced the same response, that is, no response at all.
Search firm Teamlease believes it will be a huge challenge for RCom employees to find a job in this market, especially those with eight years or less experience. There is a slight possibility for them in the logistics and eCommerce industry, but for most others there is a wide demand and supply gap. Teamlease along with other search firms such as Headhunters India and EMA partners have been inundated with resumes of RCom employees in the last few weeks.
“It’s true, there aren’t many jobs, but the ones that are there are treating RCom employees like mud. I recently went for an interview and many of my colleagues also had this experience. They said since I was from RCom and it was shutting down, they’d hire me if I came in at a much junior post and with 30% less salary,” Abhishek said. Amit Shukla, another TSM from MP, added that FMCG companies are refusing to hire anyone from RCom, saying their experience isn’t valid and skills aren’t transferable.
What Ashok Nagraj really wants to know is how RCom plans to justify how 3,000 employees quit for the same “personal reasons”, all within a week! He’s taken to a dry sense of humour to deal with deafening silence he has been facing in response to his job application to other companies, after more than a decade’s worth of experience in the industry.
RCom’s Debt Restructuring Plans
The company has proposed a “no-loan-write-off” plan, where lenders can convert Rs 7,000 crore of debt into equity for a 51% stake in the company. It also includes a plan to repay upto Rs 17,000 crore by monetising spectrum or airwaves, mobile towers and fibre assets to competitors like Bharti Airtel, Reliance Jio, Vodafone already having expressed interest. RCom also plans to sell real estate across nine metro cities to repay an additional Rs 10,000 crore.
The lenders are yet to take the offer up.
Recently, a crucial attempt by RCom at reducing its debt failed: a merger deal with Aircel worth Rs 25,000 crore fell through because of legal and regulatory interventions by several parties. This has cast a shadow over another attempt at debt restructuring running parallely: Canada-based Brookefields was to buy 51% stake in RCom’s mobile arm, the value of which changed when Aircel’s additional assets were discounted. Now, the company is negotiating the final amount with RCom – downwards – or its possibility at all.
How the mighty have fallen.