VRS in BSNL- not a viable option?

BSNL to offer VRS to one lakh employees to trim losses

During 2010-11, losses rose due to hefty outgo of salaries and expenses borne by procuring 3G and BWA spectrum

Press Trust of India / New Delhi Jan 20, 2013, 11:08 IST

In order to bring down the salary burden, which constitutes about 48% of its revenues, state-owned telecom company BSNL wants to let go one lakh employees by offering them voluntary retirement.
"Around 1 lakh people in BSNL are in excess of the requirement and the company wants these people to take voluntary retirement," a top official of the company told PTI.

He added that the voluntary retirement scheme (VRS), proposal for which is lying with the government, was made keeping in mind these numbers.

"If these people opt for VRS, the salary burden of the company will come down to 10-15 per cent, which is manageable," the official said.

The company had 2.81 lakh employees as on March 31, 2011.

BSNL profits started declining continuously from Rs 10,183 crore in 2004-05, before it recorded a loss in 2009-10.

During 2010-11, BSNL losses rose to Rs 6,384 crore mainly due to hefty outgo of salaries and expenses borne by the PSU for procuring 3G and BWA spectrum.

The official said that besides the issue of over-staffing, there is a problem regarding the age of excess staff and lack of required skills set.

"Over-staffing is one part which gets compounded by the fact that age is skewed. The average age is about 50 years. These people don't have the skills set that are required for a service provider," he added.

In order to cut losses, BSNL has drawn a blueprint to garner an estimated Rs 8,000 crore revenue through monetisation of its vast real estate as well has hiving off its tower arm over the next five years.

The proposals include utilisation of its real estate, monetising of towers assets, utilisation of its factories for revenue generation, providing broadband connectivity to schools and leasing out its CDMA network.


This is not a new one. Already the VRS scheme has been proposed by the BSNL management and sent to cabinet.  For going ahead with VRS scheme , BSNL may have to spend Rs. 20,000/- crores and more. Who will pay Rs. 20,000/-crores.?After VRS scheme, BSNL may save Rs. 3000 crores as salary . So the govt. is thinking whether it is wise to spend huge amount.

From First post matter posted on 01 01 13.

A Voluntary Retirement Scheme (VRS) is not a viable option at present since it will require a large lumpsum – anywhere between Rs 20,000 to Rs 30,000 crore – which the government is unwilling to fund and the PSUs unable to generate.