Sterlite Technologies announces significant workforce reduction amid business challenges
Sterlite Technologies (STL), a prominent Pune-based company operating under the Vedanta Group umbrella, has made the difficult choice of letting go of approximately 100 employees, including senior executives, as part of a comprehensive restructuring plan. This decision comes at a challenging time for STL and follows a strategic move earlier this year when the company divested its telecom and software units to a US-based firm.
An industry executive familiar with the matter revealed that, “Close to 100 individuals were asked to leave as the company is facing a tough time. The move is aimed at cutting operational costs, with non-core functions primarily taking a hit.”
STL is a well-known manufacturer of end-to-end optical fiber cables, offering a range of solutions that include enterprise LAN, fiber-to-the-home, and 5G solutions. However, the layoffs have been necessitated by several factors, including a slowdown in private sector investments in optical networks and stiff competition from multinational giants such as Ciena and Nokia, particularly in STL’s home market.
Among the senior executives who have parted ways with the company are Manish Sinha, the Group Chief Marketing Officer, Pankaj Aggarwall, the Chief Financial Officer, Manuj Desai, the Chief Information Officer, and Jitendra Balakrishnan, the Head of Research and Development. The announcement of Sinha’s resignation had been made back in August.
The marketing division and Sterlite Academy within the company bore the brunt of the layoffs, as noted by the industry executive.
Apart from the challenges related to a relatively weaker order book and the complex dynamics of the telecom sector, STL’s strategic diversification into a service-centric organization hasn’t yielded the expected outcomes, according to insiders.
As of the current year, the company’s order book stands at around Rs 10,500 crore across various business units, including optical networking, digital solutions, and global services. The optical networking segment alone contributes to nearly 80% of the company’s overall revenue.
The decision to reduce the workforce is part of a more extensive strategy aimed at alleviating the pressures on the company’s balance sheet. It aligns with STL’s sharpened focus on core business activities and its redirection of software and telecom business assets to Skyvera LLC, a Texas-based firm that STL had offloaded its telecom and software businesses to in March, as detailed by the industry executive.
These strategic moves are not uncommon in the business world and are often essential for a company’s adaptation and survival. They reflect a broader trend of companies responding to market conditions by making tough decisions that enable them to remain competitive, agile, and better positioned for a sustainable and successful future.