BSNL laying off employees

Amid the rising competition and an ongoing price war between the operators, India’s largest telecom player Bharat Sanchar Nigam Limited (BSNL) has decided to lay off 54,000 employees, which equals to one-third of the company’s total manpower. It’s also reported that the board of the state-run BSNL has approved the proposal to keep the BSN afloat by cutting down its expenses.

To avoid any panic situation among employees, BSNL has decided to put the decision on hold until the elections are over. It will also help employees to have more time to look out for opportunities outside BSNL.

The proposal was a part of 10 suggestions put forward by the three-member committee formed by the government with a single agenda to find ways to avoid the possible collapse of BSNL. It’s important to note that BSNL is in hot water for some time and failed to process the salary of its 174,312 employees for February month in time. After close consideration, BSNL has accepted 3 out of the 10 recommendation made by the committee, and laying off one-third of the total workforce is one of them.

Trimming down the retirement age from 60 to 58 years, Voluntary Retirement Scheme (VRS) for employees aged above 50 and above, and expediting the allocation process of 4G allocation were the three recommendations approved by the board of BSNL.

The decision to reduce the retirement age alone will result in 33,568 layoffs, which will result in the saving of Rs 13,895 crore over the next six years. Similarly, the new VRS policy will help BSNL save anything from Rs 1,671 crore to Rs. 1,921 crore. However, it’s also estimated that VRS would cost the company about Rs 13,049 crore.

The mounting losses of BSNL, after the advent of Mukesh Ambani, led Reliance Jio, forced the government to form a committee to revive BSNL. BSNL which is now the fourth largest player accounts for 9.76% of the total wireless subscriber base in India. After the advent of Reliance JIo, which resulted in either the death/exit of many small players likes of Uninor, Aircel or the merger of players like Vodafone and idea, BSNL’s revenue is on a constant decline. The company’s revenue tanked by 20% during FY 2017 – 2018. The financial health of the state-run company does not seem to improve in the just ended FY 2018-19 either.

india telecom vendors market share Jan 2019

The layoff of BSNL employees will definitely cause more stress among the employees in the telecom sector. Due to rising competition almost every company has cut down its workforce to reduce its expenses. At the same time, the merger between Vodafone and Idea had left many unemployed as a result of survival-of-the-fittest war among the employees of both the companies. With additional 54,000 employees from the India telecom sector staring at the unemployment now, the future of many job seekers in the telecom sector looks uncertain.

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