JioStar to lay off 1,100 employees after Reliance-Disney merger
What's the story
JioStar, the newly formed joint venture of Reliance Industries Ltd's Viacom18 and The Walt Disney Company's India unit, will lay off over 1,100 employees. The decision comes as part of a restructuring process to streamline operations after the merger. The layoffs will mainly affect corporate roles in distribution, finance, commercial and legal departments.
Ongoing process
Layoffs to continue until June
The layoffs at JioStar started last month and will continue until June, reported Mint, citing sources familiar with the matter. Employees from entry-level to senior directors and assistant vice-presidents have been affected. However, it's worth noting that the sports division has remained untouched due to events like the Champions Trophy, Women's Premier League (WPL), and Indian Premier League (IPL).
Impact on regional channels
Regional channels face significant workforce reductions
Several regional entertainment channels have witnessed massive layoffs, after the Viacom18-Disney Star India merger. This is because Disney Star's stronghold in key regional markets could lead to future rationalization at Viacom18's regional channels. Nevertheless, JioStar intends to bolster its sports portfolio with new channel launches.
Strategic focus
JioStar's vision post-merger
After the merger, JioStar is streamlining businesses to improve efficiencies and concentrate on high-growth sectors, especially sports and digital streaming. An industry executive pointed out that redundancies are unavoidable when two big companies with similar businesses come together. The restructuring focuses on optimizing resources and minimizing duplication to make sure the joint venture functions as a more efficient entity.
Severance details
JioStar offers generous severance packages
JioStar is providing a "generous severance" package to affected employees, including six to 12 months of salary based on their tenure. Employees are entitled to one month's full salary for every year completed at the company, on top of the notice period. Some employees from tech and digital services may be offered roles within Jio or the wider Reliance ecosystem.
Streaming competition
JioStar's future plans
Valued at ₹70,352 crore (post-money basis), JioStar will take on streaming giants such as Netflix and Amazon Prime Video while bolstering its traditional television portfolio. Reliance Industries holds a majority stake in the company via Viacom18 and direct ownership, while Disney owns 36.84%. Nita Ambani has been named chairperson of the new entity with Uday Shankar as vice-chairman.