Hit by the global credit crisis, Tata Steel is planning to reduce its headcount by more than 7,600 by 2010, an internal memo issued by the country’s largest steel maker says. The current strength of the company is nearly 31,500 and the plan is to reduce it to close to 23,900, says the memo made available to HT.
Company sources said the work-force cut would primarily be done through mechanisation of plants, outsourcing of work and the closure of a couple of units, in addition to other rationalisation measures.
"As ESS is a voluntary process, we cannot ascertain the number of people who will be opting for this option; hence no number comes into the picture,” said a company spokesman in Jamshedpur
Corporate spokespeople in Mumbai said they could not offer any immediate comment.
Tata Steel has already put on hold its two large greenfield expansion plans in Jharkhand and Chhattisgarh.
Tata Steel recently re-launched a lucrative early separation scheme (ESS) considered by many as a golden handshake project. The company expects to convince about 2,200 workers to make use of this scheme soon, and about 1,400 are expected to be from the steel works department.
Following the global recession, the company has already announced to put on hold two large Greenfield expansion plans in Jharkhand and Chhattisgarh, which would incur a total investment of around Rs 66,000 crore.
The company is focusing on modern technology to increase productivity and the ESS is an exit route for less skilled workers, being offered in agreement with the labour unions.