The voluntary retirement scheme (VRS) rolled out by debt-ridden Bharat Sanchar Nigam Limited (BSNL) has found more takers. Around 93,000 employees of state-run BSNL and Mahanagar Telephone Nigam Limited (MTNL) have opted for the voluntary retirement scheme, as per a media report.
The report said that around 78,569 BSNL employees and around 14,400 MTNL employees have opted to retire. Most of the BSNL employees who have opted for the VRS are in the non-executive category and fall in the age group of 55-60 years.
A senior Department of Telecommunications (DoT) official source was quoted as saying by the publication, “About 93,000 people have opted for VRS. What is significant is there is not a single court case. BSNL’s wage bill will reduce by about 50 percent, while MTNL wage expenses will come down by about 75 percent after the process is completed. Their annual expenditure on employees, which was about Rs 1,300 crore, will come down to Rs 650 crore.”
The scheme had been rolled out last November in order to help the two ailing telcos overcome their long salary dues and meet the daily cash flow requirements. The government intervened and introduced a Rs 69,000 crore worth four-step revival process in October 2019. More than 22,000 employees of BSNL opted for the scheme just within two days of the state-owned corporation announcing the scheme.
In all, nearly one lakh BSNL employees are eligible for the VRS out of its total staff strength of 1.50 lakh. Through the VRS, BSNL is looking at savings of about Rs 7,000 Cr in wages, considering anywhere between 70,000-80,000 employees opt for it. Hopefully, the schemes will make some significant dent in the loss-making sprees of the two firms. MTNL has reported losses in nine of the past 10 years and BSNL too has been ringing in losses since 2010.
However, at the same time, to ensure business continuity amidst job cuts, DoT has also instructed BSNL to have measures in place that ensure a smooth transition and make sure that work does not get affected, in particular, affecting telephone exchanges in rural areas. How do the two firms ensure that post major drops in staff strength remains to be seen.