BSNL Gears Up For Competition, Will It Result In Layoffs?

BSNL Gears Up For Competition, Will It Result In Layoffs?

The grand old state-owned Telcom company, BSNL or Bharat Sanchar Nigam Limited is pursuit to be more competitive in the cut-throat market.

Juviraj AnchilUpdated: Tuesday, February 27, 2024, 12:38 PM IST
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As according reports emerging from various sources, the grand old state-owned Telcom company, BSNL or Bharat Sanchar Nigam Limited is looking to be more competitive. In accordance to the information emerging, the government is ruminating over network upgradation, sales enhancement to improve BSNL's operational efficiencies. In addition, another point that was brought to discussion is the possible step of employee cost rationalisation. According to officials, the company currently has a high workforce cost, and it needs to be 'rationalised' to reduce the losses.

What could rationalisation mean?

Cost cutting measures are common in corporate paradigm, and one method often deployed in the direction reduction of the workforce in place. Recently, at least in the past two years many tech companies, after the hiring spree of the pandemic years, let many of their workers go. But, all of these were private entities, layoffs, and particularly, mass-layoffs is a not a concept, that is often exercised by PSUs, especially in India. In India, a government job is by default, meant to be secure.

As according to reports from ET, despite 78,323 individuals opting for the voluntary retirement scheme (VRS) since its inception in 2019, the BSNL's staff cost remained high, accounting for 38.4 per cent of the total revenue in the fiscal year 2022-23.

Woes of BSNL

Founded in 2000, the state-owned company, currently employees, 60,104 persons. But the company has a net income of −8,162 crore, a lot of it being earmarked towards operating expenditure, particularly salaries and other employee-related expenditure, as being a PSU, it comes with certain advantages, regarding availability of resources.

In 2022-23, when BSNL lost it lost nearly 10 million of its users, the company, as a reaction to it, bled and posted a loss (before exceptional items) of Rs 6,662 crore, the same year.

Transition phase?

Of late, the company has made attempts to shed its tag as a anachronistic institution, and talked to introducing a new work culture as well, but will the recent report suggesting a competitive overhaul, lead to a mass layoff is something that remains to be seen. This comes a year after protests in Kerala, regarding 'outsourcing regime' and delayed payments.

It also comes at a crucial juncture, as discourses regarding, whether, government should be in the business at all have echoed in the chambers of India Inc. in addition, the government also owns 33.14 per cent of another telco, that is bleeding, Vodafone Idea. Coming back to BSNL, it currently languishes fourth on the market share ladder at 8.36 per cent, as market leader, Reliance Jio has 38.81 per cent of the market, followed by Bharti Airtel, with 32.78 per cent. The hybrid, government-private company, Vodafone Idea is a distant third, with 19.88 per cent.

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