The loss making public sector telecom company, BSNL is planning to introduce VRS for its 280,000 employees. The cost of VRS is estimated to be around Rs 5000 cr, for which the financial assistance will be provided by DoT. Around 50,000 employees are expected to avail this benefit. BSNL posted a loss of Rs 1823 cr during 2009-10 and the loss is expected to go up to Rs 2500 cr during 2010-11.
The current manpower strength of BSNL is much higher than the industry standards. DoT is targetting to reduce the manpower by around 1 lac during the next 4 to 5 years. While 50,000 employees are likely to retire during this period, an additional 50,000 reduction will be met through VRS.
DoT and Board for Reconstruction of Public Sector Enterprises had already recommended VRS in BSNL. The reduction of work force was earlier suggested by Sam Pitrodia who is advisor to the Prime Minister on Infrastructure.
DoT has also directed MTNL to introduce VRS to at least 15,000 employees during this year. This is approximately one third of the total work force. This will cost MTNL approximately Rs 3000 cr.
However, both the public sector telecom companies will have face strong opposition from the employee unions which are opposing both the moves to reduce work force and VRS.