It is amazing how quickly Jio has managed to become the third largest telecom operator in India. Since its launch, it has already gained 180 million plan subscribers and is ready to creep into other industry verticals like FTTH and DTH. All this while, most experts assumed that only the private sector within the telecom industry had been disrupted by Jio. However, this is not true. Government-owned BSNL is facing steady losses since Jio’s launch. The company must face the task of firing 35,000 employees in order to save 5,000 Crore INR.
IIM Ahmedabad Offers Suggestions on Preventing Loses
In order to prevent incurring more loses, IIM Ahmedabad had been given the task of saving Jio. The students had to come up with a viable plan to save this telecom operator and their suggestion was to fire 35,000 employees. This number may sound really harsh but to be fair, BSNL has 1, 74,000 employees, which is 5 times more the average employee count of private telecom companies. So it only makes sense to start with that.
IIM Ahmedabad has also suggested that BSNL offer voluntary retirement to its loyal employees. This means that the company will have to incur further expenses of 13,000 Crore INR. However, in the long run, this will help them streamline all their costs and prevent more loses.
Freezing Employee Benefits
BSNL is employing another cost-cutting measure and that is freezing employee benefits. Both, travel allowances and medical allowances have been frozen in an effort to save money.
Anupam Srivastava, the Managing Director of BSNL, said “We are cutting costs in terms of electricity, administrative expenses and freezing our employee benefits. For the time being, we are not giving any LTC (leave travel concession) benefits, etc. The medical expenses are also being controlled,”
This paints a very bleak picture for the company. It had taken a hit of 1,925.33 Crore INR, which indicated that their total revenue had dropped by 15%. This is not surprising considering that just to support an employee base of 1.73 lakh employees, this company ends up spending 15,000 Crore. Cutting down the number of people working for the company had to be the first logical step to save cash.
Talking about the advice from IIM Ahmedabad, Mr. Srivastava said: “They said if you (BSNL) have to really survive, we need have to do various such activities to ensure that company survives the turmoil in the market and benefits to employees can come when the company is profitable.”
When will the employees be released from their contracts?
BSNL has not confirmed any dates or timelines regarding firing its 35,000 employees. However, Mr. Srivastava did indicate that the main details of the voluntary retirement packages will be charted out “very soon”, which makes one think that the mass layoffs will also occur soon.
Unfortunately for these employees, most other telecom companies in India are not faring that well either. So the job market for them will certainly be a hostile one.