Approximately, 54,000 people might lose their job at BSNL as the board of the company has accepted the proposal to lay-off a large number of employees. The news came from Deccan Herald and was reported by ET Telecom. It is noteworthy that the story of BSNL being in heavy losses was already floating in the industry. A few months back, an expert panel was set up which was to help BSNL take itself out from the grim situation. Also, many models for revival were suggested by this expert panel. In a proposal consisting of ten points, three were approved by the company’s board. Now the board is waiting for the elections to be over so that it can take the final call.
DoT to Hold Back on Decision Till Elections
The Department of Telecommunications (DoT) is also unlikely to go ahead with the lay-off of BSNL employees until elections are over. The sources which knew about the matter 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.”
The three proposals which were accepted by the BSNL board consisted of the reduction of retirement age from the present year limit of 60 years to 58 years. The board also agreed on the Voluntary Retirement Scheme (VRS) for all employees aged 50 and above and was all in for the allocation of 4G spectrum to BSNL. The new decision of retirement and VRS will lead to a mass layoff of BSNL employees. This layoff is likely to engulf 54,451 employees of the government led telco. To keep this in perspective, this is 31% of the total 174,312 people strong workforce of BSNL.
It is worth noting that BSNL’s decision of reducing the retirement age from 60 years to 58 years will cut down its employee count by 33,568 people. This, in turn, will save BSNL a total of Rs 13,895 crore over the next six years on the wage bill. As per the calculations which were run on the BSNL workforce, the results showed that the average age of BSNL’s employees was over 55 years.
BSNL and MTNL Face Widening Losses Due to Data Tariff War
The situation of both the government led telcos, BSNL and MTNL has been so grim due to widening losses that they were not able to pay salaries to their employees in February. Both the companies knocked on the government’s door to seek financial shelter, and for a resolution of legacy issues, however, the centre hasn’t made a move yet.
In the last week of March, the Department of Telecommunications (DoT) had also sought recommendations from Trai regarding the allocation of 4G spectrum to the government led telco. On which Trai has said that it will begin the consultation process soon. BSNL and MTNL are the only two telcos in the Indian telecom industry after the private telecom players to have been devoid of fourth-generation network technology until now.