BSNL’s strong move: 19,000 employees will face layoffs

BSNL plans to lay off its workforce by 35%, offering a second VRS (Voluntary Retirement Scheme) to lay off 18,000–19,000 employees.

According to the report of Economic Times, the Department of Telecommunications (DoT) has requested Rs 15,000 crore from the finance ministry to support the plan, aiming to reduce BSNL’s excessive salary bill. 

Is it approved? 

The BSNL board has approved the VRS plan and sent it to the Ministry of Communications. Before reaching the Cabinet for final approval, the Ministry of Finance, led by Nirmala Sitharaman, must first approve it.

By implementing this plan, BSNL hopes to reduce its yearly staff salary costs, which now amount to ₹7,500 crore and account for 38% of its total revenue. It is anticipated that the suggested plan will reduce this to roughly ₹5,000 crore each year.

BSNL’s financial implications of layoffs

For the fiscal year 2023–24, BSNL recorded revenue of ₹21,302 crore, which was a marginal improvement over the year before.

There are currently 25,000 executives and more than 30,000 non-executives working for the company. 

The telecom giant is thinking that a Voluntary Retirement Scheme (VRS) would be a significant step toward increasing efficiency and achieving financial stability.

Allegation of ‘Deliberate Conspiracy’ 

The goal of the proposed layoffs is to “streamline operations and improve efficiency” by reducing this spending to Rs 5,000 crore. 

A senior official privy to the plans quoted, “BSNL’s board has sent a proposal to the DoT to reduce the employee base via VRS and improve the telco’s balance sheet.”

The Congress Party has responded to this development by accusing the Modi administration of a “deliberate conspiracy” to demolish public sector business in order to benefit private companies.

“At a time when India’s youth are battling ‘bumper’ unemployment, Modi’s government is throwing thousands out of work while making his friends richer,” the Congress continued, highlighting the nation’s unemployment crisis.

Allegations have heightened the controversy, claiming that the Modi government recently paid Boston Consulting Group (BCG) Rupees 132 crore to create a “revival strategy” for BSNL.

Employees, meanwhile, have called the initiative “futile” and questioned its efficacy in light of the company’s failure to bring out 4G services across the country.

Although the BSNL board has authorized the VRS plan, officials stress that they have not made a final decision and that negotiations are still ongoing.

2019 history of laying off 20,000 contract workers

This is not BSNL’s first attempt at a restructuring.The government approved a Voluntary Retirement Scheme (VRS) as part of a ₹69,000 crore revitalization package for MTNL and BSNL in 2019.

Approximately 93,000 workers chose to retire under the plan, which came with a total cost of almost ₹17,500 crore, including pensions and benefits.

But there were drawbacks to the smaller workforce as well, like delayed wage checks, underscoring the difficulties of such changes. 

Stakeholders are hopeful that this calculated move will result in a more resilient and competitive future for BSNL as it gets ready for yet another major personnel realignment.