BSNL’s Second VRS Proposal Likely Shelved Amid Employee Opposition
The Department of Telecommunications (DoT) has faced significant resistance from BSNL’s employee unions regarding the proposed second Voluntary Retirement Scheme (VRS), which aims to reduce the company’s employee costs and improve its financial standing. In light of this uproar, the DoT has reportedly put the proposal on hold for the time being.
The second VRS proposal, which was recently approved by BSNL’s management, would have seen a reduction of at least 35% of the company’s workforce. With over 56,000 employees, this meant the potential exit of nearly 20,000 workers. The financial cost of implementing the scheme was estimated at ₹ 15,000 crore, a significant burden on the government. While the government’s objective is to streamline BSNL’s operations and make it profitable by FY27, it now faces mounting opposition from employee unions who argue that this measure places the blame unfairly on the workforce. Employee unions, including the BSNL Employees Union and the Sanchar Nigam Executives Association, have strongly criticised the proposed VRS. They contend that the real reasons for BSNL’s struggles lie not in its workforce but in government policies and the inefficiency of BSNL’s management. The unions argue that while employees have faced multiple hardships, the management and government have failed to address systemic issues.
P Abhimanyu, General Secretary of the BSNL Employees Union, voiced his concerns in a letter to the BSNL CMD. He suggested that the government’s focus on reducing the employee base would do little to solve the company’s deep-rooted problems. Similarly, MS Adasul, General Secretary of the Sanchar Nigam Executives Association, stressed that management and DoT officials must also take responsibility for BSNL’s current predicament, not solely place the blame on employees.
Despite the strong opposition, the government remains committed to its plan to make BSNL profitable, particularly by FY27. A significant part of this strategy involves controlling employee costs, which currently constitute 43% of BSNL’s operating revenue, with the company spending Rs 8,304 crore on salaries, allowances, and other benefits in FY24. However, the DoT has acknowledged the importance of further consultations before moving forward with any VRS proposals. The government has enlisted Boston Consulting Group (BCG) to develop a comprehensive revival plan for BSNL, which includes making the company more competitive against private telecom players. BCG, being paid ₹132 crore for this project, is expected to submit its report within the next two months, after which a final decision regarding the VRS will be made. In the interim, BSNL’s financial performance shows signs of improvement, albeit slowly. For the first half of the financial year 2024-25, the company narrowed its loss to ₹2,785 crore, compared to ₹ 2,951 crore in the same period last year. Revenue from operations rose by 10.4%, reaching ₹9,235 crore, and BSNL is aiming to capture a 25% market share of the mobile subscriber base by the end of 2025.
For employees, the second VRS proposal raises concerns about job security, especially after the first VRS in 2020, which saw 80,000 employees opt for retirement, far exceeding initial expectations of 30,000-35,000 employees. The unions argue that rather than forcing large-scale retirements, the government should focus on improving BSNL’s competitiveness and operational efficiency. Employees believe that their skills and contributions are undervalued in the context of these ongoing VRS proposals. They argue that BSNL’s woes are not a result of excessive staffing but are due to management failures and outdated policies. As the company seeks to modernise and adapt to the competitive telecom market, employees hope for solutions that protect their interests while also addressing the company’s structural inefficiencies. While the government’s plan to reduce BSNL’s workforce via a second VRS aims to cut costs, it has met with significant opposition from employee unions. The future of this proposal depends on further consultations and the outcomes of BSNL’s strategic revival plan, which is expected to provide a more holistic approach to the company’s challenges. Employees are now hoping for an approach that involves better management, operational reforms, and a fairer distribution of responsibilities, rather than relying on mass retirements to solve BSNL’s financial issues.
