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BSNL, the Indian public operator, is going through a difficult period. Recently, he made headlines about late payments to employees.
According to reports in the press, it is preparing to lay off about 54,000 employees, representing 31% of its total workforce. BSNL would also be developing a plan to lower the retirement age from 60 to 58 years. The measures clearly aim to bring BSNL to profitability.
According to reports, it is likely that measures will be announced after the May elections. The Indian government is already criticized for not creating enough jobs in a country with one of the youngest populations in the world and a high unemployment rate.
But Anupam Shrivastava, president and CEO of BSNL, has addressed Twitter to minimize the speculation surrounding the company.
"Straightening of BSNL designed by DoT [India’s Department of Telecommunications] and BSNL includes 4G spectrum allotment and offers a lucrative VRS [Voluntary Retirement Scheme] to the willing staff. The reduction of retirement age or the dismissal of employees are not at all envisaged. BSNL denies such appearances in the media in this regard, "he said.
BSNL is the only Indian service provider not to offer 4G service yet, and a commercial launch of 4G could help improve its future.
But the company will always have to reduce its wage costs. With 176,000 employees, BSNL today employs one of the largest workforce in the telecommunications industry in India. Wages currently account for about 60 percent of revenues – a major reason for a loss of about Rs. 176.5 billion in the last fiscal year.
Personnel costs are not the only problem, however. BSNL's market share has remained stable over the last three years and revenues have continued to fall. The annual revenues of the operator went from 324.1 billion Indian rupees (4.7 billion dollars) during the fiscal year 2015/16 to 250.7 billion rands (3.6 billion in 2017/18.
Any initiative to cut 54,000 jobs would be unprecedented. Public sector roles are coveted in India as they are supposed to be safe. A redundancy program is likely to provoke a reaction from employees and unions.
Indian telecom professionals have suffered from the consolidation of the market. The arrival in late 2016 of Reliance Jio, an aggressive newcomer, unleashed a series of mergers and acquisitions that left many people in the jobless sector. If BSNL also decides to fire employees, the situation will only worsen.
Gagandeep Kaur, contributing editor, special at Light Reading
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