In reaction to a spate of exits, Vodafone Idea (Vi) has given an extra month’s pay as a one-time ex-gratia payout with the November 2020 salary to all of its employees.
Why Would This Happen?
Recently, Vi is struggling with the employee exits including at senior levels ex-chief technology officer Vishant Vora, former legal head Kumar Das, chief technology security officer (CTSO) Amit Pradhan and ex-brand officer, Kavita Nair.
In response, it has also elevated its director (marketing) Avneesh Khosla to the position of chief marketing officer (CMO) which was vacant from the last two years.
While the additional compensation from Vi comes with a condition that the employee has to remain on the company’s rolls till March 31, 2021.
On violation of the condition, it would be deducted from the final settlement, according to the source.
Vi Going Through Tough Times
Further, the move shows the telecommunication company’s desperation to hold on to its employee base even if the company is going through tough times with bolster 4G networks and plug customer losses.
Currently, the loss-making telco is desperately trying to arrange funding to ramp up its 4G network and clear its huge backlog of adjusted gross revenue (AGR) dues.
“People resources were the telco’s most critical assets in these demanding times when it is trying to stabilise operations, arrest customer losses and grow the 4G business”, said a top Vi executive.
The research head at SBICap Securities, Rajiv Sharma said, “It makes sense for Vi to go the extra mile to retain key managerial talent as it needs to quickly catch up with Reliance Jio and Bharti Airtel on 4G coverage, especially since the loss of key executives at this stage could impact customer services quality, leading to more potential subscriber and revenue losses,”.
Fall In Subscription
On top of that, subscriber fall remains a problem area for the loss-making telco, which lags its nearest rivals, Jio and Airtel on 4G coverage.
Vi lost more than 8 million customers during the September quarter.
In terms of market share, Vi’s revenue market share (RMS) too fell by 22 basis points (bps) sequentially to a modest 22.6% in the July-September period.
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