The Department of Telecommunications (DoT) is planning to get approval from the Finance Ministry to put in place a second voluntary retirement scheme (VRS) at Bharat Sanchar Nigam Limited (BSNL), media reports said.
The move is aimed at slashing the workforce by 35 per cent and improve the financial health of the telecom operator, the report by The Economic Times said. Further, BSNL has requested the ministry for Rs 15,000 crore to manage the costs of the VRS rollout.
The board of the telecom firm has suggested cutting down its employee count by 18,000 to 19,000 via the VRS scheme. Citing a source in the know, the report said this move is expected to strengthen the company’s balance sheet.
Currently, BSNL uses about Rs 7,500 crore or almost 38 per cent of its overall revenue to see to employee salaries. The firm intends to cut down this expense to Rs 5,000 crore annually, in order to streamline its operations.
The communications ministry will look for approval from the Cabinet once it gets the clearance from the finance ministry.
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The VRS programme was approved by the BSNL board on Monday to lower its wage expenses, specially as the company is yet to launch its 4G services across the country. However, citing a senior official with the firm, the report said that the VRS plan remains under discussion and no final decision has been made on the issue yet.
In the 2023-24 fiscal year (FY24), the company’s revenue touched Rs 21,302 crore, clocking a slight improvement in comparison to the previous year. Earlier in 2019, the authorities approved a revival plan worth Rs 69,000 crore for BSNL and Mahanagar Telephone Nigam Limited (MTNL).
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