BSNL May Lay Off 54,000 Employees, To Take Final Call Post Elections
As many as 54,000 of the loss-making Bharat Sanchar Nigam Ltd (BSNL) are likely to lose their job as the board of the company has accepted the proposal to lay off around 54,000 of its employees, reported Deccan Herald. This is probably one of the ways by which the state-owned company is trying to cut costs, further it has also reduced the retirement age from 60 to 58 years.
BSNL may lay off employees
Reportedly, the BSNL board in March had approved three out of 10 suggestions which were put forth by a government-established expert panel. However, the report stated that the Department of Telecommunications (DoT) is unlikely to go through with the layoff proposal until the elections are over.
Sources in the DoT said, “Announcing the VRS package or job cuts and shutting down businesses of the telecom firm would have huge implications on employees and ongoing elections. DoT decided to wait and watch.” Among the other recommendations which were agreed upon is the reduction of the age of retirement, Voluntary Retirement Scheme (VRS) for all employees aged 50.
The average age of the company’s workforce is estimated to be 55 and above. Reduction of retirement age will reduce the employee count by 33,568 employees. This is about 31% of the company’s 174,312-strong workforce. Such methods will help the company save a total of Rs 13,895 crore over the next six years. The proposition of VRS will also result in annual savings ranging between Rs 1,671 crore to Rs 1,921.24 crore.
Reportedly, after Jio entered the Indian telecom market, BSNL has been experiencing financial distress. BSNL’s revenue share dropped by 20% in 2017-2018. After the company started incurring losses, the government had set up a three-member panel for its revival.
BSLN failed to clear the salaries for the month of February in 2019. The 1.76 lakh employees-strong company had failed to pay salaries for the month of February owing to a financial crisis. The Business Standard reports that the Department of Telecommunications is considering a Rs 13,000 crore bailout plan for the state-owned PSU.
BSNL: Navratna PSU To ‘Incipient Sick’
In February, more than a lakh BSNL employees and officers held a three-day strike. The strike was held to highlight a number of issues including allocation of 4G spectrum to the telecom entity and non-implementation of long-pending wage revision. The All Unions and Association of BSNL (AUAB) alleged that “corporates like Reliance Jio” are eating-up their market.
Once a Navratna PSU, the position of BSNL has worsened over the years. In March 2018, the state-owned entity was declared “Incipient Sick” by the DoT. An organisation is called incipient sick when there is a continuous decline in gross output for three consecutive years and when there is an erosion in net worth up to 50% as compared to the previous year.
In a written reply by Telecom Minister Manoj Sinha, Lok Sabha was informed, “BSNL and MTNL have been incurring losses for a number of years. Therefore, as per the Department of Public Enterprises (DPE) guidelines, both BSNL and MTNL have been declared as ‘Incipient Sick’.”