BSNL, India's state-owned operator, is going through tough times. Recently, it has grabbed unfavorable headlines for delayed payments of wages to employees.
Now press reports report suggest it is preparing to lay off about 54,000 employees, representing 31% of its total headcount. BSNL is also said to be drawing up plans to lower the retirement age from 60 to 58 years. The measures are clearly aimed at moving BSNL toward profitability.
The likelihood is that measures will be announced after elections in May, according to reports. India's government is already under fire for not creating enough jobs in a country with one of the youngest populations in the world and high levels of unemployment.
But Anupam Shrivastava, BSNL's chairman and managing director, has taken to Twitter to play down the speculation that surrounds the firm.
"Turnaround of BSNL being devised by DoT [India's Department of Telecommunications] and BSNL includes allotment of 4G spectrum and offering lucrative VRS [Voluntary Retirement Scheme] to willing staff. Reduction of retirement age or laying off employees is not at all being considered. BSNL denies any such media appearances in this regard," he said.
BSNL is the only Indian service provider that has yet to offer a 4G service, and a commercial 4G launch could help to improve its fortunes.
But the company will still need to reduce its wage costs. With 176,000 employees, BSNL has one of the largest workforces in the Indian telecom industry today. Wages currently account for about 60% of revenues -- a key reason it racked up a loss of about 176.5 billion Indian rupees in the last fiscal year.
Staff costs are not the only issue, though. BSNL's market share has remained static for the last three years, and revenues have continued to fall. The operator's annual revenues declined from 324.1 billion Indian rupees ($4.7 billion) in the 2015/16 fiscal year to INR250.7 billion ($3.6 billion) in 2017/18.
Any move to slash 54,000 jobs would be unprecedented., Public-sector roles are coveted in India because they are assumed to be secure. A program of layoffs is likely to provoke a backlash from employees and trade unions.
India's telecom professionals have suffered as the market has consolidated. The arrival in late 2016 of Reliance Jio, an aggressive new entrant, triggered a spate of mergers and acquisitions that have left many people in the sector without work. If BSNL also decides to lay off employees, that situation will only get worse.
— Gagandeep Kaur, contributing editor, special to Light Reading