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Recruitment companies see 40-50% revenue drop from telecom sector in 12 months

Source | https://m-economictimes-com.cdn.ampproject.org : By Devina Sengupta & Sreeradha D Basu

Turmoil in India’s telecom sector has hit the recruitment industry hard, with their revenue from the segment falling sharply in the past 12 months as companies curbed hiring and paid less for placements.

“Till a couple of years ago, the telecom sector was among the top five out of our 25 business segments. Now it is in the bottom five,” said Shiv Agrawal, managing director of recruitment company ABC Consultants.

He said revenue from the industry has dropped 40-50% in the past one year. The top sectors for the Bengaluru-based company included information technology, pharmaceuticals, ecommerce and telecom, until consolidation started about a year ago.

“We now have more outplacement mandates than hiring ones,” he said, referring to the reskilling and placement of retrenched employees in other companies.

“It is, without doubt, the worst-performing vertical as of now. Two-three years ago, it was among the top three-four performers,” said James Agrawal, MD of BTI Consultants.

BTI’s loss of revenue in the telecom business is close to 80% at the mid and senior level, dropping to Rs 40 lakh levels from about Rs 2 crore.

The telecom sector, reeling under Rs 5 lakh crore of debt and a sharp fall in revenue, profitability and free cash flows, has been consolidating since the entry of Reliance JioInfocomm in September 2016 sparked a price war.

The sector lost a fourth of its workforce, or some 75,000 employees, in the past year as operators, tower companies and vendors consolidated to remain afloat in the severely competitive industry.

Vodafone India and Idea Cellular are merging to become the largest mobile operator in the country. The consumer mobile business of Tata Teleservices is being merged with Bharti Airtel, the No. 1 operator, and Reliance Jio is acquiring the wireless assets of Reliance Communications.

Recruiters said their placement fees have also been affected.

“Clients who would pay 20% for a placement now want to pay 15%,” said Kris Lakshmikanth, founder-chairman of search firm The Head Hunters India. The firm, which focuses on hiring senior candidates, said it received Rs 12 lakh from the telecom sector in 2017 compared with Rs 1 crore earlier.

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