Recession may have just become a worry for Mukesh Ambani and Anil Ambani, brothers who own some of India’s most valued companies, too.
Sources tell Network 18 layoffs and cost cutting have been ordered in Reliance Industries Ltd. (RIL), owned by Mukesh, and the Anil Dhirubhai Ambani Group, which is owned by his younger brother Anil.
Sources say several senior and mid-management executives across the RIL group companies have been asked to leave. The company has scrapped plans for its semi-conductor business for now and the team for the project has been asked to leave, sources say.
CNBC TV 18's Executive Editor Shereen Bhan reports RIL’s official position is that three of its key projects—all related to its petroleum and gas business—are in the final leg of implementation. But the company makes no mention its retail business, which was seen as a growth industry but now may be scaled down because of recession.
Network 18 asked for a statement from RIL on whether it was downsizing and was told: "As a good corporate practice, we constantly examine our cost competitiveness and take appropriate measures regularly."
On layoffs in its management team, the company said: “Apart from normal attrition, we are not aware of several senior and management executives across the group (who have) been asked to leave."
Cost cutting “is a practice which is undertaken constantly at Reliance”. Asked whether it planned to put its semi-conductor business on hold for now, RIL said: “As a part of our business expansion, we continue to evaluate various long term potential business opportunities. As a matter of policy we do not comment on any business which is still in the evaluation stage.”
CNBC-TV 18’s Economic Policy Editor Vivian Fernandes reports that ADAG has laid off 6,000 people. The lay-offs cut across ADAG companies in life insurance, general insurance, mutual funds, commercial and consumer finance, and entertainment.
The job cuts have been implemented in all hierarchies: from marketing heads to middle management and lower management officials and customer executives.
Sources say ADAG has drastically pared its marketing team for life insurance in Mumbai and in Delhi it has been disbanded. Marketing budgets have been cut too.
The number might seem big, but not in relative terms as the life insurance business of ADAG employs about 30,000 people.
ADAG denied any lay offs or retrenchments. The company predicts that the next few months would be a high-investment season for tax saving products and it would employ up to 90,000 agents and sales representatives.
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