Tuesday, August 30, 2011

BSNL VRS Plan: DoT want VRS for 1 Lakh Employees

Department of Telecommunications (DoT) has reportedly scrapped state-run telecom operator BSNL’s proposal to cut down its workforce by 21,000 citing the number as too low considering the financial burden DoT has asked BSNL to formulate a revised plan for offloading its workforce through schemes such as voluntary retirement scheme (VRS). The department which has been reviewing the performance of the loss-making public sector unit (PSU) is of the view that BSNL needs to slash its workforce by about 1,00,000, as suggested by Sam Pitroda reports stated. The move, reports added, is part of the government’s initiatives to revive the telco which is struggling to survive in the industry due to high employee cost, declining revenues and low tariffs. The PSU has an employee base of 2,80,000. According to reports, BSNL’s sister concern MTNL, has asked DoT to clear a VRS plan that would be offered to over 15,000 employees out of the total 45,000. After the company’s board gave it nod to the plan, MTNL had asked DoT to help them financially – Rs. 2,000-3,000 crore to implement the retirement scheme. The state-run telco has an employee base of about 45,000. Reports further added that BSNL will have to make a one time payment of about Rs. 40 – 50 bn for its VRS scheme, for which DoT will support it financially.
The need to reduce workforce was first mooted by Sam Pitroda, advisor to the Prime Minister on infrastructure. The Board for reconstruction of public sector enterprise had also recommended that BSNL should offer VRS to its employees. However, any reduction in the workforce has been met with strong opposition from the workers’ unions but expert believe it is need of hour to retire people who are not suitable for latest technology and spare workforce to revive telecom giant BSNL, who stood from last 150 Years as P&T, DoT and now BSNL.