Tata Teleservices Shut, 5000 Employees to Be Fired; Tata Group May Finally Buy Air India
With a debt of Rs. 30,000 Crores, Tata Teleservices has been forced to shut down.
There is some bad new for overall employment news for India. 149 year old Tata Group will soon shut down their telecommunications arm Tata Teleservices, and as a result, approximate 5000 employees would be axed.
This is Tata Group’s biggest decision related to termination of employees on such a massive scale, as never before in their 149 year old history, so many employees have been fired en masse.
In a related news, Tata Group Chairman N. Chandrasekaran has strongly hinted about a possibility of Air India being acquired by Tata, finally.
Are these two news inter-related?
Tata Teleservices Shutdown: Biggest Termination Exercise For Tata Group
At the time of writing, Tata Teleservices has a combined debt of Rs 30,000 crore, and even for a business conglomerate like Tata Group, this is simply too much to bear.
Unconfirmed reports are coming in that Tata Group has approved the plan to shut down entire operations of Tata Teleservices, and all the employees would be asked to leave.
As of March, 2017, Tata Teleservices had 5101 employees on roll.
While some of the employees maybe be relocated to sister concerns of Tata Group, 90-95% of the employees would be asked to leave.
No doubt handsome severance package and voluntary retirement scheme (VRS) for older employees have announced, but the future of these 5000 odd employees is now uncertain.
An unnamed senior official from Tata Teleservices said, “The Tata Group has always taken care of its people, but very few will get absorbed in other group companies. It is unfair to saddle other Tata companies with employees of TTSL.”
Last month, circle heads had been asked to resign by March, 2018, and average salary of circle heads is around Rs 1 crore.
Kris Lakshmikanth, chairman of search firm Headhunters India said, “Circles heads of Tata Teleservices whose resumes we are placing have been given time till March 31 and were told of this in September. If they leave now, they will be given the salary for the remaining months of this financial year,”
Fortunes of Tata Teleservices have been on a downhill, ever since NTT Docomo from Japan exited their joint venture, after investing Rs 14,000 crore in 2014.
Last Saturday, it was widely reported that Tata Group has informed the Govt. about their plans to shut down their wireless business.
Tata Group May Finally Buy Air India
The same time when talks about firing 5000 employees from Tata Teleservices have been gaining momentum, Tata Group Executive Chairman Natarajan Chandrasekaran has said they may buy Air India, very soon.
In an interview with CNBC-TV18, he said, “We will definitely look at it. We still don’t have all the details. Every business proposal will be very seriously looked at and we will look at that (Air India). Definitely. But currently we don’t have the data… there are so many different groups within Air India and then there is real estate, there is debt, there is liabilities and we got to look at all of that it but we will definitely look at it.”
If we read between the lines, then it is clear that Tata Group may join forces with Singapore Airlines and jointly acquire Air India, or acquire a controlling stake in the debt-ridden state carrier.
In June this year, we had speculated three reasons why Tata Group should buy Air India, and primarily, the debt of Rs 50-60,000 crore of Air India was the catalyst.
We will keep you updated as we receive more inputs.
