Are Things This Bad in Airtel? Layoffs Loom

We got this piece from Indian Economic Times

 

Last June, both Sunil Mittal and Bharti Airtel were the toast of the town. The $9-billion acquisition of Zain Africa transformed the 53-year-old Mittal into a global entrepreneur. And it made Airtel the fifth largest mobile operator in the world, with a footprint in 19 countries.

 

Exactly a year later, things look drastically different. Airtel’s profits have fallen for five quarters in a row, unprecedented for a company that set benchmarks for record growth and profits in the past. It is losing revenue and market share in India. And the latest, as reported by ET on June 25, is that Airtel India is undertaking a major operational restructuring — a move that could affect almost 2,000 jobs. The company responded on Saturday saying the restructuring won’t affect many jobs.

 

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The bad news from Africa — both on costs and timelines — has come as a bigger surprise. Africa-based experts point to three things. One, the company underestimated the level of complexity and set unrealistically aggressive targets. Two, Zain had made little investment in infrastructure in the African operations.

 

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