Reliance Group Sacks 5,000 Employees in India Across Group Cos.
Reliance Group, the largest public sector enterprise in India is sacking 5,000 of its employees from across group companies. This is being done across new verticles where it was involved in aggressive recruitment till a few months back including retail, logistics etc.
It is cutting back in a big manner as the expansion plans have been put on hold.
It is equally interesting that the owner Mukesh Ambani was crowned the richest person in the world in October 2007. This is the scale at which things have changed in the last one year and accelarated in the past few months. It is believed that most of the expatriate workers have also been asked to go as they were the most heavily paid in the retail setup.
The global financial crisis has hit India's largest private sector conglomerate. The Reliance group and its associate companies have asked about 5,000 employees to resign, according to inside sources. A significant portion of the staff reduction has come from the retail operations.
Some of the companies involved in the exercise are Reliance Retail, Reliance Logistics, Reliance Info Systems and Reliance Corporate Park. The resignations, as against a straight lay-off, leave employees in a better position to find new jobs.
A Reliance Industries spokesman did not comment on a detailed questionnaire sent by Network18, asking for more time to respond.
The associate companies have been supporting Reliance Industries' core operations for several years. But now, divisions within these companies are being shut, sources from within the companies said. Most of the affected employees are permanent, middle-level managers.
Some employees said as many as 3,000 people in the retail business could be sent home, as the proposed expansion had been scaled back after an abrupt change in economic prospects in the last six months.
The group entered the retail business in 2006 with a planned investment of Rs. 25,000 crore. It was a strategic move designed to take the group beyond its core commodity business and was supported by a slew of subsidiary and associate companies like Reliance Gems and Jewels, Reliance Supply chain, Reliance Dairy Production and Reliance Agri Products. But soon protests by small retailers and then the economic slowdown hampered aggressive expansion plans. Now, employees in nearly all departments related to the retail business are being fired, said a former employee, who recently left.
Rising on the back of booming stock market in India the fortunes of Mukesh Ambani owner of the Reliance group had hit the roof, things have changes since October 2007.
Billionaire Mukesh Ambani today became the richest person in the world, surpassing American software czar Bill Gates, Mexican business tycoon Carlos Slim Helu and famous investment guru Warren Buffett, courtesy the bull run in the stock market.
Following a strong share price rally on in his three group companies, India's most valued firm Reliance Industries, Reliance Petroleum and Reliance Industrial Infrastructure, the net worth of Mukesh Ambani rose to $63.2 billion (Rs 2,49,108 crore).
In comparison, the net worth of both Gates and Slim is estimated to be slightly lower at around $62.29 billion each, with Slim leading among the two by a narrow margin.
The five richest people in the world with their net worth
1. Mukesh Ambani ($63.2 billion)
2. Carlos Slim Helu ($62.2993 billion)
3. William (Bill) Gates ($62.29 billion)
4. Warren Buffett ($55.9 billion)
5. Lakshmi Mittal ($50.9 billion)