Department of Telecommunications (DoT) is preparing to seek approval from the finance ministry for a second voluntary retirement scheme (VRS) at Bharat Sanchar Nigam Limited (BSNL).
This move is part of an effort to reduce BSNL’s workforce by 35%, aiming to improve the company’s financial situation.
The state-owned telecom operator has requested Rs 15,000 crore from the finance ministry to fund the VRS implementation.
BSNL Workforce Reduction: Background and Rationale
BSNL’s board has proposed cutting its employee base by 18,000 to 19,000 through the scheme, aiming to bolster the company’s balance sheet.
Currently, BSNL allocates approximately Rs 7,500 crore, or about 38% of its revenue, to employee salaries.
The company plans to reduce this expenditure to Rs 5,000 crore annually as part of a broader effort to streamline operations.
For FY24, BSNL’s revenue reached Rs 21,302 crore, showing a slight increase from the previous year.
The company’s workforce includes more than 30,000 non-executive employees and 25,000 executives.
This isn’t the first time BSNL has embarked on an overhaul.
In 2019, the government approved a Rs 69,000-crore revival plan for BSNL and Mahanagar Telephone Nigam Limited (MTNL), which included an early retirement programme.
Over 93,000 employees opted for that scheme, costing Rs 17,500 crore in ex-gratia payouts.
Current Proposal and Future Steps
The communications ministry will seek Cabinet approval for the initiative once the finance ministry approves it.
BSNL’s board approved the VRS programme to reduce its wage bill, especially as the company has not yet launched its 4G services nationwide.
However, a senior BSNL official informed that the VRS plan is still under internal discussion, and no final decision has been made.
BSNL has faced challenges in asset monetisation due to regulatory hurdles.
The telco has also been impacted by salary delays for the reduced workforce after previous rounds of restructuring.
The government approved a second revival package for BSNL and MTNL in 2022 worth Rs 1.64 lakh crore.
This package provides support for balance sheet stress, capital expenditures, and AGR dues.
A third Rs 89,000 crore package was approved in 2023 for 4G and 5G spectrum allocation.
The plan includes offering commercial data services, fixed wireless access, and captive private networks.
Note: We are also on WhatsApp, LinkedIn, Google News, and YouTube. To get the latest news updates, subscribe to our channels. WhatsApp: Click Here, Google News: Click Here, YouTube: Click Here, and LinkedIn: Click Here.
