Reliance Retail likely to cut down on back-end staff after Future deal

Reliance will control a third of the organised retail market in India, following the transaction, with access to multiple retail formats
Reliance Retail may rationalise the workforce that will be added following the acquisition of the Future group's retail, logistics, warehousing and wholesale assets in a near Rs 25,000-crore transaction.

This will be at the back end, said persons in the know, including those in managerial positions, which constitutes around 20 per cent of Future's 60,000 total workforce. Eighty per cent of Future's workforce consists of store staff, say informed sources, who are likely to be retained, since close to 1,800 retail stores from the Future network will be part of Reliance Retail.

Reliance, say experts, is expected to carefully examine all areas of synergy once the deal is completed, to ensure that it is value-accretive. Doing away with duplicate roles and harnessing strengths will be part of the exercise.

Officials at Reliance Retail were not immediately available for comment.

But Arvind Singhal, chairman, Technopak, says that a retail business is people-intensive and therefore the requirement of staff at the front end would be high. "Whatever attrition will happen following the acquisition will be at the corporate level," he said.

Reliance will control a third of the organised retail market in India, following the transaction, with access to multiple retail formats including Big Bazaar, FBB, Easyday, Central and Foodhall, spread in over 400 cities. Reliance Retail's store count will expand to over 13,500, consolidating its position as a retail giant, sector analysts said.

Reliance has also launched its new commerce venture called JioMart since May, which it has taken to 200 cities and will require people to drive its operations, persons in the know said.

At the same time, the company is expanding its neighbourhood store concept under its SMART point network for which people will be needed, again at the front end. 

In its FY20 annual report, Reliance Retail said that it was aiming to capture a sizeable share of the untapped consumption potential in the country using physical stores, digital platforms and B2B channels. "Our large scale and rapid execution has been the major driver of robust growth in the retail market," the company said.

The deal with Future is expected to take around six to eight months to be completed, since there are mandatory approvals that have to be sought to clear the transaction. This includes nods from Sebi, CCI, NCLT, shareholders and creditors among others.

The Future group management will run the business till the deal is completed, implying that workforce rationalisation will not be undertaken till then. 

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