Low on cash, Vodafone Idea has reportedly laid off about 1,500 employees from its offices across India in a bid to cut expenditures. Vodafone operates in India under the brand Vodafone Idea. It has over 319 million users in the country. Idea, owned by Indian billionaire Kumar Mangalam Birla, previously operated as an independent telecom player.
The reports come just a little over two months after Vodafone Idea decided to operationally curb its telecom circles to 10 from the previously functional 22 clusters. The move came into effect in May, in a bid to reduce costs and increase the efficiency of its networks.
At present, Vodafone Idea has not officially commented on media reports about the lay off of 1,500 staff members.
Given the delicate market situation of Vodafone Idea, it has been reported that telecom equipment players like Nokia, Ericsson, Huawei, and ZTE are purposely delaying accepting new 4G gear orders from the telecom company.
Gear vendors are skeptical if the firm that owes them roughly between $465-$532 million for equipment supplies, will be able to pay off new orders and clear past dues.
The network operator is also liable to pay the Indian government $6.8 billion in Adjusted Gross Revenue (AGR) dues, that have accumulated for over 20 years. As of June 2020, the company has only been able to pay back $853 million of its total bill. AGR is a usage and licensing fee that telecom operators are charged by India's Department of Telecommunications.
While pleading for 15 years to pay back the AGR dues, Vodafone Idea recently informed India’s Supreme Court that no banks were willing to provide them with any guarantee given the telco’s strangled financial situation.
Earlier in January, Kumar Manglam Birla, the Chairman of Vodafone Idea also hinted that the British company could wrap up its operations in India.