Photo: Reuters
Photo: Reuters

Fears of major job cuts loom large as India’s second and third largest mobile-phone service providers Vodafone India and Idea Cellular inch closer to a merger, to withstand market disruption caused by Reliance Jio Infocomm.

Nearly a quarter of its combined workforce of 21,000 people could go in the next few months as the companies look to save costs, eliminate duplication and improve efficiency, the Economic Times has reported.

Both companies are making losses amid huge revenue pressure and a combined debt of about 1.2 trillion rupees (US$18.3 billion) and have been advised by the nodal team handling the merger to shed at least 5,000 employees, the daily added.

The merger has been cleared by all sectors except the Telecom Department and is expected to occur sometime next month.

Employees with a poor performance record or job profiles that appear to be the same in the two companies are at higher risk of getting the chop.

The merger will create India’s largest mobile-phone operator by subscribers and revenue market share, surpassing Bharti Airtel.

The entry of Reliance Jio Infocomm, owned by India’s richest man Mukesh Ambani, in 2016 caused widespread disruption through its prolonged free voice and data offers.

Many telecom entities such as Telenor and Tata Teleservices have quit the market as they could not withstand the pricing pressure, which led to major job losses.