Reliance Industries cuts 42,000 jobs in major workforce reduction, sparking concerns over economic impact

Reliance Industries Ltd (RIL), India’s largest conglomerate, recently made news for a significant workforce reduction. A report by The Economic Times says that RIL let go of 42,000 employees in the fiscal year 2023-24, reducing its total workforce by 11% compared to the previous year. This big cut, especially in the company’s retail division, has raised concerns. 

The workforce reduction is part of RIL’s strategy to enhance cost efficiency. The company’s total employee count fell from 3.89 lakh in FY 2022-23 to 3.47 lakh in FY 2023-24. Additionally, new hires decreased by over a third, totaling 1.71 lakh in FY24, according to media reports.

While RIL’s move is viewed as a strategic business decision, it has also sparked concern. RIL’s retail business, which accounts for around 60% of its total workforce, was the most affected. Employee numbers in the retail segment dropped from 2.45 lakh in FY23 to 2.07 lakh in FY24.

This was accompanied by store closures and a slowdown in retail network expansion. While Reliance Retail added over 3,300 new stores in FY23, FY24 saw a net addition of only around 800 stores, bringing the total to 18,836. The telecom division, Reliance Jio, also experienced a workforce reduction, with employee numbers falling from 95,326 in FY23 to 90,067 in FY24. Despite these reductions, RIL’s overall employee benefits expense increased by 3% year-on-year to Rs 25,699 crore.

While RIL’s workforce reduction aims to streamline operations and boost efficiency, it also raises questions about the broader economic impact. For a company of RIL’s size, such significant job cuts could indicate underlying challenges within the economy, especially in sectors like retail that depend on consumer spending and economic stability. 

The sharp cuts in the retail segment suggest potential shifts in consumer behaviour or market conditions that prompted RIL to reassess its workforce. As India continues to face challenges in job creation, RIL’s large-scale reductions could have wider economic implications.