Consumer durables firm Videocon Industries plans to save Rs 300 crore by December this year by enhancing productivity to overcome a sales slump.
“The overall market has slowed down and we are trying to overcome by increasing quality and productivity innovation by 30 per cent,” Kwang Ro Kim, vice chairman and CEO told Hindustan Times.
For instance, the company is working towards manufacturing standardised remote controls that work with all television sets rather than model-specific ones. The company has also outsourced manufacturing of its new products like invertors and batteries to contract manufacturers.
“We will be consolidating our 500 authorised service centre across India and provide training to the staff at these centres to improve the quality of service offered to consumers,” Kim said.
The company employs a total of 9,000 people with about 5,000 on its pay rolls and the rest on contract basis. “We advanced our annual appraisal this year and have identified 12 per cent of our permanent employees as below average performers,” Jyoti Shekhar, vice president – corporate HR at Videocon Industries said.
While the better of the lot are being redeployed in the company’s other businesses, the rest are being laid off. Of the total 600 employees under the scanner, Videocon has already redeployed about 185 employees in its other group businesses.
The company’s profits fell from Rs 250 crore in the October-December 2007 quarter to Rs 60 crore in December 2008. Over the past one year the company's share price fell by 70 per cent and is currently trading at Rs 84.9.