The Department of Telecommunications (DoT) has temporarily suspended plans for a second voluntary retirement scheme (VRS) at Bharat Sanchar Nigam Limited (BSNL) following strong resistance from employee unions. This development comes just days after BSNL’s management had approved the scheme, which would have impacted approximately 56,000 employees at an estimated cost of Rs 15,000 crore to the government.
The proposed VRS aimed to reduce BSNL’s workforce by 35%, marking another significant attempt at restructuring the state-owned telecom operator. However, employee unions have challenged the premise that staff reduction is the solution to the company’s financial challenges. Instead, they point to what they describe as systemic mismanagement and problematic government policies as the root causes of BSNL’s struggles.
“The focus should be on addressing operational inefficiencies and policy constraints rather than workforce reduction,”
To navigate this complex situation, DoT has engaged Boston Consulting Group (BCG) at a fee of Rs 132 crore to develop a comprehensive revival strategy for BSNL. The consulting firm’s recommendations, expected within two months, will likely influence the final decision on the VRS implementation.
This isn’t BSNL’s first attempt at workforce optimization. The company’s initial VRS in 2020 saw approximately 80,000 employees accepting the package, demonstrating significant interest in such schemes. However, the current scenario appears more complicated, with stronger opposition from various stakeholders.
Despite these challenges, BSNL has shown some positive financial indicators. The company reported a 10.4% revenue growth in the first half of FY24, while its losses decreased to Rs 2,785 crore. These improvements suggest that the company’s revival efforts are yielding some results, though challenges remain.
“The final decision on the VRS will be based on a thorough evaluation of BCG’s recommendations and further consultations with all stakeholders,” a senior DoT official stated, speaking on condition of anonymity.
