VSNL plans to prune 700 employees via 3rd VRS

Internet and telephony major Videsh Sanchar Nigam Ltd (VSNL) is planning a third voluntary retirement scheme (VRS) for which about 700 -- more than one-fourth -- of its 2,600 employees will be eligible.

However, the company's brass remains tight-lipped on how many are expected to opt for the scheme. Only 69 had opted for the VRS floated by the erstwhile public-sector company, now a part of the Tata Group, in February 2004. As many as 800 were eligible.

The company's first VRS in May 2003, soon after the privatisation, had attracted 950 of the 1,800 employees that were eligible.

At the time the government divested its holding in the company, VSNL had 3,000 employees.

In the third VRS, VSNL estimates a total outgo of Rs 120"�130 crore, if all the eligible employees opt for the scheme.

The company is expected to announce the VRS during the first week of November. Of the 700-740 employees that would be eligible for the VRS, 460 would be from the non-executive cadre and 260-300 from the executive cadre. The scheme is open to employees that have completed 10 years of service or are over 40 years of age, sources close to the development said.

When contacted, a VSNL spokesman said, "Considering the rapid transformation which the industry is going through we are exploring various alternatives including a VRS to enhance the organisation's capability to meet the challenges of the highly-competitive market environment."

VSNL's top-level management has already discussed the issue and is believed to have commenced negotiations with union leaders in Mumbai, Chennai and Kolkata.

The VRS package for executive staff is believed to be over Rs 22 lakh per employee and over Rs 14 lakh for non-executive employees, in addition to medical benefits the company intends to offer.