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Reliance Industries Ltd (RIL), India’s largest conglomerate, has made headlines with a significant workforce cut, laying off 42,000 employees in the fiscal year 2023-24.
According to reports in the Economic Times, this represents an 11% decline in the total workforce, which fell from 3.89 lakh in FY 2022-23 to 3.47 lakh in FY 2023-24. The cuts are particularly pronounced in RIL’s retail division, where the number of employees fell from 2.45 lakh to 2.07 lakh.
This strategic move appears to be part of RIL’s efforts to increase cost efficiency.
There was also a significant decline in new hires, by more than a third to 171,000 in FY24, according to media reports.
The workforce cuts were accompanied by a slowdown in store expansions. Although Reliance Retail opened over 3,300 new stores in FY2023, only about 800 new stores were opened in FY2024, bringing the total to 18,836. This slowdown is in line with the workforce cuts and reduction in store openings.
Telecom arm Reliance Jio also had to cut staff, with the headcount falling from 95,326 in FY2023 to 90,067 in FY2024. Interestingly, despite these cuts, RIL’s total employee expenses increased 3% year-on-year to INR 25,699 crore. This suggests that despite the reduction in workforce, the cost per employee may have increased or other benefits costs may have increased.
The cuts, particularly in retail, raise concerns about the economic impact. RIL’s retail sector, which employs around 60% of its total workforce, is crucial in the consumer-led economy. The cuts could indicate possible changes in consumer behaviour or market conditions and force RIL to reassess its operations.
For India, which faces ongoing challenges in job creation, such massive layoffs by a major company could have ripple effects throughout the economy. The move underscores RIL’s focus on streamlining operations, but also raises questions about the health of the retail sector and the broader economic landscape.
