Inside Financial Markets

4th PTCL VSS targets 9,000 employees

Pakistan Telecommunication Company Limited (PTCL) Monday announced Voluntary Separation Scheme (VSS) with an estimated cost of around Rs 10 billion for 9,000 of its staffers, ie 50 per cent of total workforce, in a bid to reduce human resource expenses and compete in the market. This is the fourth VSS scheme introduced by the PTCL with an immediate effect ie November 28, 2016.

Addressing a joint press conference Chief Human Resource Officer PTCL, Syed Mazhar Hussain said that all required conditions, including board’s approval, have been obtained in this regard. He further said that a minimum threshold for employees will be Rs 1 million while maximum compensation for a single employee is estimated at Rs 13.5 million. He admitted that PTCL has not reached the place where it should have been by now. The company’s revenue was about Rs 72 billion in 2006 which has reduced to Rs 62 billion at present; however, still one can say that it has been maintained through diversification of its products, he added.

Mazhar Hussain said that in the last scheme of 2014, the PTCL could not relieve all the employees who opted for this scheme since business could not let such a sizeable employee base go away at once as well as take risk of stalling operations. However, with the successes reaped through the previous schemes and improved company performance, the PTCL is now in a better position to offer this scheme to around 9,000 employees and can manage to relieve around 3,000 employees.

In addition to an attractive package of up to 100 basic salaries and several other financial benefits, the PTCL will also arrange vocational training, recruitment support through head-hunters and financial management through experts at PTCL’s expense. “This is just our small token of appreciation and reward for the employees’ lifelong commitment to the company and to help them sustain a stable future,” Mazhar Hussain added. In addition to the packaged benefits, the scheme has several exclusive incentives and bonuses. Salient features of the VSS scheme are:

“1. Regular employees will receive transition pay with a multiplier of 4 (ie 4 times years of service) whereas New Compensation Pay Group (NCPG) employees will receive it with enhanced multiplier of 6 times years of service. 2. Minimum length of service for eligibility of pension has been reduced from 20 to 18 years and the retiring employees will get the pensionary benefits of additional 2 years of service. 3. Pensionable employees also have the option to choose between a lump sum payment of enhanced commutation or continued pension, depending on their particular aspirations. 4. NCPG optees will be given gratuity up to 4 times of basic salary (gratuity will be tax exempted) 5. All the scheme optees will be given leave encashment of 180 days irrespective of their leave balances. 6. Allowances of 6 months for regular employees and 15 months for NCPG employees are also part of this lucrative package. 7. In case of early adopter of this scheme, an additional amount of Rs 200,000 will be paid as Early Bird Bonus if the offer is accepted by the employee within first 20 days of the announcement date. 8. If 30% or more employees of the targeted population of any region will opt for the scheme, an additional amount of Rs 150, 000 will be paid to each optee of that region. 9. Outstanding loan along with due mark-up will be written off. 10. EOBI pension benefits will also be provided to all employees opting for the VSS as per EOBI act and its rules. 11. To support the VSS Optees in getting jobs in other companies, services of leading head hunters will be arranged at company’s expense. PTCL liability will be restricted to the head hunters’ commission in case the employee is selected for any job. 12. In order to help the optees in beneficial cash management of their amounts, services of financial advisors (leading cash management companies/funds) will be arranged. Employees can consult them to having various investment options for making a better decision. 13. A comprehensive plan has been worked out to arrange vocational trainings at the expense of the company, enabling the optees to get the required skill set in different fields of their choice for a more affluent future,” the official said.

The PTCL official said that the Company offered VSS scheme for the first time in 2008 when some 30,000 employees had availed the opportunity. Then another 5,700 employees’ availed VSS scheme in 2012, while company’s last VSS scheme announced in 2014, however, did not relieve employees.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)