Mukesh Ambani’s Reliance Industries, known as India’s largest conglomerate, made headlines recently for significantly reducing its workforce by 11 per cent, or over 42,000 employees, in the financial year that ended in March 2024. This move comes as the company faced a slowdown in revenue growth, prompting a hiring slowdown and a significant number of voluntary separations.
Reliance Industries, with its diverse range of businesses including the largest retail chain in India and a leading telecom network, employs a large number of people across various sectors. The company’s annual report revealed that more than 143,000 employees opted for voluntary separations, contributing to the reduction in workforce. This reduction was also accompanied by a decrease in the pace of hiring, with approximately 171,000 new employees brought in during the year, compared to 263,000 hires made the previous year.
One of the key divisions affected by the workforce reduction was Reliance Retail, which saw a decrease in its employee count from around 246,000 to 207,000 by the end of the financial year. The company noted that the retail industry typically experiences high employee turnover, particularly in-store operations, which may have contributed to the decrease in workforce numbers.
The reasons behind the workforce reduction at Reliance Industries can be attributed to the slowdown in revenue growth, particularly in the retail sector. Despite raising $1.85 billion last year at a $100 billion valuation, Reliance Retail reported only a 7 per cent increase in revenue for the first quarter, falling short of analysts‘ expectations of a 15 per cent to 20 per cent increase. Additionally, the company opened significantly fewer new stores in the quarter, with only 82 new stores compared to an average of 740 stores opened per quarter in the previous fiscal year.
The trend of job cuts is not unique to Reliance Industries, as India’s top three IT services companies—TCS, Wipro, and Infosys—also reduced their combined workforce by more than 63,750 jobs last year. This indicates a broader trend of companies across various sectors facing challenges that have led to workforce reductions.
In conclusion, Mukesh Ambani’s Reliance Industries‘ decision to cut its workforce by 42,000 employees last financial year reflects the challenges faced by the company in the midst of a revenue slowdown. The reduction in workforce, along with a hiring slowdown, highlights the need for companies to adapt to changing market conditions and make strategic decisions to ensure long-term sustainability and growth.