More than 78,000 employees of BSNL will retire today under the Voluntary Retirement Scheme (VRS), in one of the largest retirement drives in the country. Reducing the number of employees is one way for the cash-strapped PSU to find a way out of a financial crisis.
At the time the VRS was announced, BSNL had approximately 1, 53,200 employees. Anybody over the age of 50 could opt for the scheme. Compensation was calculated at most 125 per cent of 40 months' salary. More than Rs 70,000 crores will be disbursed for the employees. Rs 17,169 crores will be allotted as ex gratia for the retirees. Rs 12,678 crores will be disbursed as pension allotment. The amount of ex-gratia for any eligible employee will be equal to 35 days' salary for each completed year of service and 25 days' salary for every year of service left until superannuation.
Almost 78,500 employees—half of the workforce—have opted for the VRS. "This is as per our target. We were expecting reduction of 82,000 headcount. Besides VRS applicants, around 6,000 employees also retired," BSNL Chairman and Managing Director P.K. Purwar had earlier told PTI. There would be around 85,000 employees left after the retirement drive. BSNL expects that the annual salary expenses will decrease from 2,272 crores to 500 crores.
Eventhough a large number of engineers have retired via VRS, BSNL is adamant that the quality of its services will not be affected. Landphone, broadband services will be bettered and repair works will be allotted on a contract basis. Many of its services like payments of bills will be made online.
MTNL Chairman and Managing Director Sunil Kumar said that the PSU too has exceeded the target set for VRS. "14,378 employees have opted for VRS against target of 13,650 employees. This will reduce our annual salary bill from Rs 2,272 crore to Rs 500 crore. Now we are left with 4,430 employees which is sufficient to run our business," Kumar had earlier told PTI.