Reliance Industries laid off around 42,000 employees in FY24
What's the story
Reliance Industries (RIL) reduced its workforce by nearly 11% in FY24, a decrease of around 42,000 employees compared to the previous fiscal year.
The company's total employee strength now stands at 347,000 down from 389,000 in FY23.
This decision is primarily driven by a focus on cost-efficiency and a decrease in hiring, particularly in the retail sector due to store closures and slower expansion rate.
Hiring reduction
RIL's new hires drop by over a third
RIL has also significantly reduced its new hires by more than a third to 170,000 as per its latest annual report.
An analyst from a leading broking firm who tracks RIL told The Economic Times, "The new lines of businesses (at Reliance) have matured now and have significant support from digital initiatives."
He further added that they are at a stage where they can better manage operations with optimal strength.
Sector impact
Retail sector bears brunt of workforce reduction
The retail business has been most affected by these reductions, accounting for about 60% of RIL's total workforce.
The number of employees in the retail sector dropped to 207,000 last fiscal year from 245,000 in FY23.
Jio, another division of RIL, also experienced a decrease in its employee count from 95,000 in FY23 to 90,000 in FY24.
Financial impact
RIL reports increase in employee benefits expense
Despite the workforce reduction, RIL reported that "overall voluntary separations in FY24 are lower than FY23."
The company also disclosed an increase in its employee benefits expense by 3% to ₹25,699 crore. This is a significant decrease compared to FY23 when it had increased by 33%.
During the fiscal year of 2022-23, Reliance Retail expanded its physical store network with over 3,300 new store openings bringing the total count to 18,040 by year-end.