BSNL –planning massive 54k jobs cut

BSNL (Bharat Sanchar Nigam Limited) is panning to cut 54k jobs. The State owned Telecom services provider is contemplating over huge job cut in its workforce.

Bharat Sanchar Nigam Limited

The job cut is estimated to be around 54451 workers. 

BSNL – expenses cut down:

In order to cut down its expenses government owned telecom company, has frozen employee benefits. It can be recalled that last year BSNL had saved Rs 2,500 crore through a similar cost cutting exercise and the telecom giant is planning to repeat the same this year.

job cut

Out of the money saved by the company last year, Rs 625 crore was employee benefits. The current employee strength is 3.57 lakh which is multiple times higher than its competitors who have around 25,000 to 30,000 employees.

According to the Managing Director, “We are cutting costs in terms of electricity, administrative expenses and freezing our employee benefits. For the time being, we are not giving any LTC (leave travel concession) benefits, etc. The medical expenses are also being controlled.”

Committee recommendations – BSNL :

  1. Reduction of retirement age from 60 to 58 years
  2. VRS Scheme for those aged 50 and above
  3. Creating an independent review mechanism
  4. Providing contingent liquidity support for BSNL
  5. Facilitating 4G spectrum allocation
  6. Creating project division
  7. Accelerating asset transfers from DoT to BSNL
  8. Accelerating operation of BSNL Tower Corporation Limited

Measures taken by BSNL :

Government-owned BSNL has reportedly taken steps to cut down on expenditure. The telecom operator has frozen employee benefits to support the current market situation.

The company is facing challenges in managing its finance  because of a large workforce. The company has an employee base of 1.8 lakh with an annual expenditure of up to Rs 15,000 crore.

The telecom company had announced that last year that it was able to save Rs 2,500 crore through several cost-cutting measures and hopes to save a similar amount in FY19.

BSNL Hit by competition by other Telecom co’s :

  1.  BSNL’s share in total PSU’s loss is approximately 25%.
  2. Massive manpower and salary bills is a major irritant.
  3. Landline business has been badly impacted by cheaper mobile tariffs
  4. Stiff competition from other service providers has reduce the revenues and deepened losses.
Present scenario of BSNL:

Currently the company is at a loss of Rs.7993 crore during 2017-18 an increased upward trend of 60% over the previous year.

Introduction of VRS will amount of 54451 employee’s exit which is 31% of its workforce.  The present employee tally is 174312 workers.

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