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New Delhi, September 21: Mahanagar Telecom Nigam Limited (MTNL) is reportedly going through the financial crisis, and the Government is taking steps to address the situation. Reports suggest that around 3,000 employees of MTNL may be transferred to Bharat Sanchar Nigam Limited (BSNL) and the Department of Telecommunications (DoT). The decision is said to be implemented as MTNL faces challenges in maintaining its operations amid continuing losses.
As per a report of Financial Express , the Government has started the process to transfer over 3,000 employees of MTNL to BSNL and DoT. The step may reduce operational costs and improve efficiency in the telecom sector. MTNL has struggled with financial losses for several years and the transfer of employees can be seen as a necessary step to support MTNL's future stability.
Aakash Layoffs: BYJU’s-Owned Edtech Firm Lays Off Around 100 Employees Amid Strategic Shift, Plans To Create New Roles, Hire New Talent. The Government is thinking about offering a voluntary retirement scheme (VRS) to MTNL employees. Reports also suggest that these steps may be taken to reduce expenses and to address salary payment problems due to limited funds.
Employee costs, including salaries and benefits, make up 78 per cent of MTNL's annual operating revenue of INR 728.5 crore for the fiscal year 2024. Additionally, the company has finance costs of around INR 2,690 crore, which is much higher than the revenue it generated in the last financial year that ended in March.
DoT has reportedly submitted a proposal to the finance ministry that includes options for voluntary retirement and deputation for MTNL employees. This proposal is expected to be presented to the Cabinet for approval along with a plan to help MTNL manage its debts. IBM Layoffs: Tech Giant Silently Lays Off Around 1,000 Employees Amid Plan To Adopt AI, Make Them Sign NDA To Not Talk Specifics, Says Report.
The Government might also be considering to transfer MTNL's operations to BSNL, and they are working on a service agreement for this. The agreement will likely allow BSNL to manage MTNL without actually merging the two companies. As per reports, MTNL has failed to make payments to several banks due to lack of funds.
MTNL reportedly owes a total of INR 7,873.52 crore to banks and financial institutions, and its total debt is said to be around INR 31,944.51 crore.
(The above story first appeared on LatestLY on Sep 21, 2024 11:23 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com ).
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