Reliance Industries Ltd (RIL), India’s largest conglomerate, has made headlines for a major workforce reduction, raising alarm across the industry.
According to a report by The Economic Times, Reliance has let go of 42,000 employees in the fiscal year 2023-24, reducing its total workforce by 11% compared to the previous year.
This workforce reduction is partly Reliance’s strategic business decision to streamline operations and boost efficiency. The conglomerate’s total employee count fell from 3.89 lakh in FY 2022-23 to 3.47 lakh in FY 2023-24. In tandem, new hires decreased by over a third and totaled 1.71 lakhs in FY24, according to reports.
Furthermore, the new year has seen significant store closures and a slowdown in retail network expansion. For example, while Reliance Retail added over 3,300 new stores in FY23, FY24 saw a net addition of only around 800 stores, bringing the total to 18,836.
“The new lines of businesses (at Reliance) have matured now and have significant support from digital initiatives. Now they are at a stage to better manage the operations with optimum strength. It doesn’t mean that the numbers (of headcount) won’t increase when new business opportunities emerge and strategy changes. They understand very well how to drive cost management and efficiency,” ET quoted an analyst with a leading broking firm who did not wish to be named.
However, the news has raised alarm across the business and social media world. For a company of RIL’s size, such major job cuts suggests underlying challenges within India’s economy, particularly in sectors like Retail.
Concerns have also been raised about the wellbeing, financial stability, and broken trust of Reliance’s 42,000 employees who were let go.
Among major industry players, Shaadi.com founder Anupam Mittal has found this news ‘alarming’ and has taken to social media to express his worries.
“42k? Why is this ‘quiet news’? Should be raising serious alarm bells across the economic & political circles,” he wrote.
42k? Why is this ‘quiet news’? Should be raising serious alarm bells across the economic & political circles 🤷🏻 https://t.co/L0XP0nnzHu
— Anupam Mittal (@AnupamMittal) August 10, 2024
However, one social media user responded by stating: “It was mostly from Retail, mostly part-time or contract employees depending on need. They added 1.7 lakh in other areas. Maybe they are bringing in changes. Why does it need political attention though? It’s their business decision.”
Mittal took the time to clarify his stance, writing, “What I mean is that if our largest cos are cutting down people, the job situation gets much worse. We already need 8-10 m net new jobs a year. Not suggesting they need to take it up with Reliance but rather that we need a bold plan that works.”
