Once upon a time, BSNL was counted as a prominent player in the telecommunications industry. The company, which boasted of more than 1 lakh and 76 thousand employees is now taking measures to get rid of thousands of personnel in order to cut down expenses.
More than 80,000 BSNL employees are about to opt for VRS and this decision is being welcomed by the company and the management.
As of now, BSNL has become one of the worst-performing companies in the public sector. It incurred a loss of about 14,000 crores in 2018-2019.
The company did not have enough money to pay its employees.
The first month for which the staffers received no salary was February (2019). This led to protests and demonstrations, but to no avail. Later on, BSNL somehow managed to make arrangements in order to compensate the employees.
Things were fine till May. Come June, and the company was back to square one. It failed to clear staff salaries once again.
The grave difference between the monthly income and expenditure of the company made it hard for it to continue operations. BSNL required funds on an urgent basis. About 850 crores were needed just for giving the salaries for the month of June. And then there was a debt of 13,000 crores. This is why it had come close to shutting down.
The company started slipping into loss back in the year 2016. This was the time when Jio had entered the telecom market. This move affected not only BSNL but also other strong players of the industry including Vodafone, Airtel, Idea, Tata, and Telenor.
While private companies tried to remain afloat by taking loans from banks, BSNL, a public sector company, kept suffering loses. The company wanted a loan to which the government did not agree.
Being in such a position also made it impossible for BSNL to enter the 4G market. As a result, it kept lagging behind.
About 55 percent of the company’s monthly income is spent on salaries. Every year, there is an increase of 8 percent in this budget.
The only way out of this mess is to bring down the number of staffers in order to cut down expenses.
This is why BSNL is asking its employees to opt for VRS. Those who are over the age of 50 can avail of the VRS package.
Over 80,000 employees have opted for the scheme till now. The deadline for applying for VRS is 3rd December 2019 and there is a fair chance that the numbers will go up.