BSNL mulls laying off 54,451 employees to cut costs and stay afloat

Cash-strapped Bharat Sanchar Nigam Ltd (BSNL) has proposed laying off around 54,000 of its employees, comprising 31 per cent of its total workforce, and is now waiting for government nod for doing so.

The board of BSNL has now has approved laying off of 31 per cent of its workforce after the public sector telco found it difficult to pay salaries to employees in time.
The government, however, is unlikely to oblige as the firing of employees in large numbers, especially on an election eve, could jeopardise poll prospects.
But, the company’s board says this has to be done to reduce losses, and to make sure that BSNL doesn’t shut down.
For state-owned BSNL, which is reeling under debts of more than Rs13,000 crore, the only remaining option for staying afloat is to reduce employees and thereby curtail wage costs.
Last year, BSNL suffered losses of Rs7993 crore, which is 20 per cent more than the 2017 losses.
A special task force constituted to recommend ways to revive the ailing telco made several suggestions to the government on BSNL revival, of which three have been accepted.
One of the suggestions is termination of around 31 per cent of its workforce comprising over 54,000 employees, from the company’s payroll.
Another suggestion that BSNL board has accepted, is a reduction in the retirement age from 60 years to 58 years, which alone would help BSNL remove 33,568 employees from service.
Besides the reduction in retirement age, BSNL board has proposed a special VRS for all employees aged above 50 years.
Together, the reduction in retirement age and the VRS scheme will enable BSNL to gradually reduce its employee strength by 54,451 from the current 1,74,000.
Interestingly, the average age of employees in BSNL is 55 years, and this is the reason that BSNL Board has gone for reducing retiring age, and to introduce VRS scheme.
The DoT, however, is unlikely to approve BSNL’s staff reduction plan, especially in an election eve.