Tata Motors offers third VRS scheme in four years as cost restructuring exercise
On Friday, 11 December, Tata Motors has offered a voluntary retirement scheme (VRS) to its 42,597 employees as part of a cost restructuring exercise. As per media reports, around half of the total employees are eligible for the VRS scheme.
This year, Tata Motors’ VRS scheme is expected to reduce expenses with regard to fixed cost structures for the company.
As reported by Economic Time: The eligibility criteria for this year’s VRS Scheme, employees who have been with the company for five years or more can apply. The compensation under the VRS scheme will depend upon an employee’s age and the number of years with the company. The eligible employees and workers can apply from Dec 11 to January 9, 2021.
Before this, the VRS scheme was offered to employees of different departments, across its businesses of passenger and commercial vehicles to over 1,600 employees in November 2019.
Tata Motors has been trying to reduce its employee cost over the last few years and in 2017 had launched a similar offer, but most of the permanent employees stayed away from the severance package.
Amid a downturn in the auto industry since 2019, Tata Motors’ move would follow other vehicle makers such as Hero MotoCorp Ltd, Ashok Leyland Ltd, and Toyota Kirloskar Motors Pvt. Ltd that have introduced similar schemes.
Tata Motors has reported a consolidated revenue fell 18.2 percent year-on-year to Rs 53530 … loss of Rs 314.5 crore in the quarter ended September 30, impacted by low demand in the wake of the COVID-19 pandemic. The company had posted a net loss of Rs 216.56 crore in the year-ago period and Rs 8,437.99 crore in the June quarter of the current fiscal.
