India’s largest automaker Tata Motors on Friday announced a voluntary retirement scheme for an estimated 16,000 workers across its factories that produce both passenger and commercial vehicles, in a bid to trim its workforce and increase efficiency in operations.
The domestic division of the firm has been straddling with losses that stood at `3,575 crore for the period between April-December 2014.
The VRS, which is the first such offer in well over a decade, is applicable only to shop floor workers above 40 years of age. An estimated 2,000 employees, or a little over 12% of the workforce, is expected to avail of the offer.
“In continuation of its steps to respond to an increasingly competitive business environment and macro-economic pressures that have resulted in depressed growth of the commercial vehicle and passenger car businesses in India, Tata Motors has announced new initiatives designed to enhance competitiveness,” the company said in a statement.
A company spokesperson added that instead of offering a lump sum amount, workers who opt for the offer will get a monthly payout till the age of 60.
“This will ensure an assured monthly income as opposed to just a one-time payment of a single amount,” the spokesperson said. “Further, there is also a provision for medical insurance cover for a period of 10 years post separation.”