BSNL may lay off around 19,000 employees via VRS
What's the story
The Department of Telecommunications (DoT) is planning to propose a second voluntary retirement scheme (VRS) for Bharat Sanchar Nigam Limited (BSNL).
The move would cut the state-run telecom giant's workforce by around 35% as part of efforts to improve its financial health.
The proposal, which has been approved by the BSNL board and submitted to the telecom department, could lead to axing of around 18,000-19,000 employees.
Approval process
VRS proposal awaits approval from Ministry of Finance
The proposed VRS was launched on the directions of the Ministry of Communications. It now awaits the approval of the Ministry of Finance, headed by Nirmala Sitharaman.
Once approved, it will be taken to the Cabinet for final approval.
This move comes as BSNL looks to further cut down on employee wage expenses, especially in the absence of commercial high-speed 4G data services.
Funding request
BSNL seeks ₹15,000 crore for VRS expenses
BSNL has sought ₹15,000 crore to meet the costs of the proposed VRS.
A senior BSNL official confirmed to ET Telecom that talks regarding the VRS are underway but no final decision has been taken yet.
The company currently spends nearly ₹7,500 crore, or 38% of its revenue per year, on employee salaries, which it hopes to bring down to about ₹5,000 crore per year with this scheme.
Company overview
Financial performance and workforce composition
In FY 2023-24, BSNL recorded a revenue of ₹21,302 crore, which is a marginal increase from the last year.
The company's staff includes over 30,000 non-executives and 25,000 executives.
This proposed VRS is among the many efforts being made to improve the telecom giant's financial health and efficiency.
Revival efforts
Previous VRS and revival plans for BSNL
In 2019, the government had approved a ₹69,000 crore revival plan which included an early retirement program for BSNL and Mahanagar Telephone Nigam Limited (MTNL) employees.
Nearly 93,000 employees opted for the separation scheme under this plan. The ex-gratia component of the VRS was around ₹17,500 crore, including pension, gratuity and commutation costs.
However, post-VRS implementation, salary delays were witnessed due to a reduced workforce.