BSNL's second VRS: 18,000 jobs could go as telco plans to kickstart another overhaul

The Department of Telecommunications (DoT) is reportedly planning to seek approval from the finance ministry for a second voluntary retirement scheme (VRS) at Bharat Sanchar Nigam Limited (BSNL). 

The state-owned telecom operator aims to cut its workforce by 35%, trimming 18,000-19,000 employees, to improve its financial standing, according to Economic Times (ET).

BSNL has requested ₹15,000 crore to fund the VRS initiative, which is expected to reduce its annual wage bill from ₹7,500 crore to ₹5,000 crore. Currently, salaries account for 38% of the company’s revenue. A senior official familiar with the development stated the scheme would strengthen BSNL’s balance sheet as the company works to modernize and roll out its much-delayed 4G services.

While BSNL’s board has already greenlit the VRS programme, the communications ministry will seek Cabinet approval after clearance from the finance ministry. However, internal discussions are still ongoing, and no final decision has been made, the report noted.

BSNL’s revenue for FY24 stood at ₹21,302 crore, reflecting a slight improvement from the previous year. The workforce includes over 55,000 employees, split between non-executives and executives.

This isn’t the first time BSNL has embarked on an overhaul. In 2019, the government approved a ₹69,000 crore revival package for BSNL and MTNL, which included an early retirement programme. Over 93,000 employees opted for that scheme, costing ₹17,500 crore in ex-gratia payouts.

In subsequent years, the government rolled out two more revival packages. In 2022, it announced ₹1.64 lakh crore for de-stressing BSNL’s balance sheet and accelerating 4G rollout. A further ₹89,000 crore was allocated in 2023 for 4G and 5G spectrum acquisition, with a focus on expanding commercial data services and private networks.