Reliance Jio Effect: BSNL To Layoff 54,000 Employees In An Attempt To Curb Losses
DoT officials are waiting for the new government to take a final call on this issue.
State-run Bharat Sanchar Nigam Ltd (BSNL) board has accepted a government-appointed panel’s proposal to lay off around 54,000 employees and is waiting for elections to get over before taking the final call on the issue. The three-member panel was formed by the government for the telecom service provider’s revival as it has been reeling under financial stress after Mukesh Ambani’s telecom company Jio was launched.
BSNL’s revenues reportedly dipped by 20 per cent during 2017-18 due to predatory pricing unleashed by Jio. Currently, the state-run unit is carrying a loss of Rs 7,993 crore during 2017-18, up 66 per cent from the previous year. As per a Deccan Herald report by Furquan Moharkan and Ajith Athrady, the officials are waiting for the new government to take a final call on the layoff issue.
Sources told DH that the Department of Telecommunications (DoT) is unlikely to implement the layoff proposal, put forth by a government panel until the elections are over. “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,” sources said.
The BSNL board also approved other recommendations by the government panel such as a reduction of retirement age from 60 years to 58 years, Voluntary Retirement Scheme (VRS) for all employees aged 50 and above, and expediting the allocation of 4G spectrum to BSNL.
As per reports, if the retirement age and VRS decisions are taken, 54,451 BSNL employees will exit i.e. 31 per cent of its 174,312-strong workforce. The average age of the BSNL workforce is estimated to be above 55 years.
The move to reduce the retirement age is expected to save Rs 13,895 crore over the next six years on the wage bill. VRS, on the other hand, will result in annual savings in the range of Rs 1,671 crore to Rs 1,921.24 crore.