Loss-making BSNL mulls move to cut 54k workers

The state-owned telecom services provider Bharat Sanchar Nigam Limited (BSNL) is mulling over a massive reduction in its workforce to the tune of 54,451 workers by reducing the retirement age to 58. A voluntary retirement scheme (VRS) is also on the cards for its employees.

BSNL's board, which is meeting in New Delhi on February 15, is expected to discuss these proposals among many other recommendations made by an expert committee, highly-placed sources told DH.

If implemented, the move will lead to a reduction in retirement age of BSNL employees to 58 from the present 60 years. The move is likely to reduce the employee count of the BSNL by 33,568 employees. With this, BSNL is expected to save a total of Rs 13,895 crore over the next six years. Currently, the company is carrying a loss of Rs 7,993 crore during 2017-18, up 66% over the previous year.

An expert committee constituted by the Department of Telecom (DoT) last year has recommended for the introduction of a voluntary retirement scheme (VRS) for its workforce after the reduction in retirement age. As a result of these two measures, BSNL will see the exit of around 54,451 employees, which is 31% of its total workforce. It currently employs 174,312 workers.

The telecom services provider has received an interim report of the three-member committee tasked with the turnaround of the loss-ridden company. The members of the panel include Prof Rekha Jain (co-ordinator), Prof Vishal Gupta and Professor Ajay Pandey -- all professors at Indian Institute of Management - Ahmedabad (IIM-A).

IIM-A was given an assignment on studying BSNL and giving its recommendations for "revival/restructuring of BSNL" vide letter F.No. 10-3/2017-SU-I dated April 6, 2018, and July 31, 2018.

The report, accessed by DH, is set to be discussed over in the board meeting of the state-owned corporation later this week.

"Proposal for the reduction of retirement age and a VRS has been under discussion. It will be discussed at the meeting on Friday. For now, the board hasn't taken any stand," sources confirmed.

The average age of BSNL workforce is above 55 years, according to the report.

"This is quite a workable proposal. Employees will be getting all the benefits including pension," one of the top officials of the company said, wishing anonymity.

"A VRS scheme should be brought in for all employees in the age group of 50 or more years. The scheme will be modelled as per DPE guidelines and the ‘Gujarat Model’," the report recommended.

This will result in annual savings in the range of Rs 1,671 crore to Rs 1,921.24 crore. It is estimated that the cost of VRS for the company will be about Rs 13,049 crore, the expert committee report said.

The committee has also made eight other recommendations to improve the financial health of the ailing company. The recommendations include: accelerate asset transfers from Department of Telecom (DoT) to BSNL, accelerate the operation of BSNL Tower Corporation Limited (BTCL), create a separate fibre infrastructure division, create a project division, facilitate 4G spectrum allocation, provide contingent liquidity support for BSNL, postpone listing of BSNL and create an independent review mechanism.

However, it is learned that the board is not keen on operationalising its tower subsidiary as it fetches the company about Rs 700 crore of revenues.

The state-run corporation has been reeling under the financial stress after the advent of Jio. The revenues of the company dipped by 20% during 2017-18, on the back of predatory pricing unleashed by Mukesh Ambani-owned Jio. The company clocked Rs 25,071 crore in revenues during 2017-18, as against Rs 31,533 crore in 2016-17.

BSNL sources are expecting a similar trajectory in losses during the current fiscal.