BSNL freezes employee benefits, to cut down expenses: Report

Moneycontrol News

Government-owned Bharat Sanchar Nigam Limited (BSNL) has reportedly taken steps to cut down on expenditure. The telecom operator has frozen employee benefits to sustain the current market situation, according to a report in DNA.

The report states that the company is facing challenges in managing its finance because of a large workforce. The company has an employee base of 1.8 lakh with an annual expenditure of up to Rs 15,000 crore. The telecom company had announced that last year that it was able to save Rs 2,500 crore through several cost-cutting measures and hopes to save a similar amount in FY19.

Out of the Rs 2,500 crore, the company was able to save Rs 625 crore in employee benefits. BSNL chairman and managing director Anupam Shrivastava told DNA that the company is cutting costs in administrative expenses, electricity and freezing employee benefits. The public sector company has stopped giving benefits on leave travel concession and is controlling on medical expenses as well.

The company is also suggesting a Voluntary Retirement Scheme (VRS) for its employees based on a preliminary report commissioned to IIM Ahmedabad. VRS could be given to 35,000 employees which would cost Rs 13,000 crore.

BSNL is working on different options on how to manage and meet the costs for VRS package, said Shrivastava. He further mentioned that employees came forward and supported the company’s move to cut down costs. Employees stated that to sustain in the market, the company would have to take such steps and benefits can be forwarded when the company is profitable, added Shrivastava.

According to the Telecom Regulatory Authority of India (TRAI), BSNL was amongst several telcos that posted a fall in adjusted gross revenue which recorded a fall of 15.32 per cent at Rs 1,925.33 crore.

Shrivastava stated that the company’s focus is on preserving market share, for which it would have to take financial hits.