Indian Railways is planning massive layoffs as it struggles to increase efficiency and cut costs. The national transporter, which has currently 13 lakh employees, is planning to reduce its staff to 10 lakh in the next six to 12 months.

According to the sources in the Railways, the Railway Board has written a letter to all zones and asked them to identify the staff, who are inefficient, who can be asked to take voluntary retirement. The board in its letter written to zonal railway departments on July 27 and asked them to send a performance report of employees by August 9.

The national transporter may ask the staff to take voluntary retirement who have above the age of 55 years or those who have completed 30 years of service in the first quarter of 2020. The railways is currently in the process of recruiting more than 1.5 lakh staff mostly in safety and operational sectors.

Railway Minister Piyush Goyal earlier said that the national transporter must adopt technology and cut down the workforce to increase its profit. The Minister had also said that the government will study the profiles of the staff and take action against inefficient and corrupt officials.

The Indian Railways has been suffering from poor operating efficiency for the past several years. During the last three years of the previous Modi government, the operating ratio remained above 95 per cent, reaching 98.4 per cent during 2017-18.

Operating ratio indicates an entity's operating expenses as a percentage of its revenue. A higher operating profit hinders an organisation's ability to make profit.

Though revenue of Indian Railways has risen for the past several years, the staff expenses and allocation to pension fund account for 66 percent of Railways' expenditure. The national transporter's expenditure on staff is very high and it kept increasing with every Pay Commission revision.