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State-owned telecom giant Bharat Sanchar Nigam Limited (BSNL) is planning for a workforce reduction. It is planning to trim its staff by 35 per cent. To facilitate this, the Department of Telecommunications (DoT) is seeking approval from the Finance Ministry for a second Voluntary Retirement Scheme (VRS). BSNL currently spends around Rs 7,500 which is nearly 38 per cent of its total revenue, on employee salaries. The company plans to reduce this expense to Rs 5,000 crore annually to improve efficiency and streamline its operations.
BSNL's board has approved the VRS to reduce its wage costs, especially since the company has yet to roll out 4G services nationwide. However, a senior official mentioned that the VRS plan is still under discussion, and no final decision has been made yet, according to the report.
BSNL's board has approved the VRS to reduce its wage costs, especially since the company has yet to roll out 4G services nationwide. However, a senior official mentioned that the VRS plan is still under discussion, and no final decision has been made yet, according to the report.
BSNL has been grappling with financial challenges and fierce competition in the telecom sector. With private players dominating the market, the company has faced declining revenues and increasing operational costs. In 2019, BSNL introduced its first VRS, which saw over 78,000 employees voluntarily retire, saving the company an estimated ₹7,000 crore annually in wage expenses. Building on that initiative, VRS 2.0 aims to further rationalize the workforce while ensuring minimal disruption to operations.
The current scheme targets employees who meet specific age and tenure criteria. The objective is to encourage voluntary retirements through attractive severance packages, including pension benefits and financial incentives, to create a leaner and more efficient organization. But, many long-serving employees worry about the adequacy of severance benefits and opportunities outside the organization, especially in an era of rapid technological change.
The current scheme targets employees who meet specific age and tenure criteria. The objective is to encourage voluntary retirements through attractive severance packages, including pension benefits and financial incentives, to create a leaner and more efficient organization. But, many long-serving employees worry about the adequacy of severance benefits and opportunities outside the organization, especially in an era of rapid technological change.
The VRS 2.0 is expected to align BSNL’s workforce structure with industry benchmarks, enabling the company to allocate resources more effectively towards 4G and 5G network expansions.
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