Digitisation, consolidation testing resilience of India Inc

Job losses, mergers part of painful transition

Winds of change are sweeping across the world of business and consequently the job market as well.

The slowdown in major world economies, including USA and Europe, over a variety of reasons and factors, are having a cascading effect globally and pulling down market sentiments and causing blip in the export markets.

All these factors coupled with the phenomenal disruptions being caused by technological advancements and galloping digitisation is having a telling effect on employability matrices.

As economy undergoes adjustments to the changing dynamics of market and consumer behaviour across sectors, a fresh phase of consolidation is slowly pervading Indian Inc.

There are confirmed and unconfirmed reports of consolidation processes being pursued in as varied sectors in India, including telecom, e-commerce, media, e-startups, banking etc.

In the telecom sector, the entry of Reliance Jio in the consumer market last year had already started to unnerve established players like Airtel, Vodafone and Idea with its free data offer to consumers until April 2017.

So far, Reliance Jio has already crossed the consumer base of 100 million and more millions would only get added this month before the free data offer expires.

Already, British telecom giant Vodafone and Aditya Birla Group telecom company Idea are exploring merger possibilities for greater synergies and cost advantages to stand up to the fierce competition coming from Jio. There are also reports of Airtel evincing interest in acquiring Telenor’s India operations.

Similarly, public sector State Bank of India (SBI) has drawn up a roadmap to merger half dozen smaller associate banks with itself. The merger plan had been on the backburner for quite some time, but things are now moving faster now.

The media industry, especially the print media, is facing a tough challenge due to digitisation of media and social media platforms, which offer free news on the go to the youth and upwardly mobile consumers. At the same time, the media consumption habits are undergoing a sea change and the media companies are slowly adopting to the new milieu.

Recently, some top notch Indian media houses not only handed over pink slips to a large number of journalists and other workforce, but even shut down operations in some major cities as they strengthen their digital offerings.

In e-commerce space, successful Indian startups, including Snapdeal and Flipkart, besides several other little known e-platforms are resorting to scaling down operations and thus cutting employee costs through rationalisation, optimization, consolidation and integration processes.

It is true that such consolidation is resulting in job losses, but once the economy rebounds and the companies internalise digitisation in their corporate DNAs, newer job opportunities with newer job profiles would get created.