Struggling with mounting losses in its domestic operations, Tata Motors on Friday announced voluntary retirement scheme for workers as it tries to overcome the impact of depressed growth in commercial vehicle and passenger car businesses.
The company said it was undertaking a slew of new initiatives, including productivity benchmarking, cost optimisation and job enrichment, for a more effective and efficient organisational structure aligned to market demand, Tata Motors said in a statement.
"As a part of these initiatives, the company has announced a Voluntary Retirement Scheme (VRS), presently intended for the workmen," it said.
When contacted, a company spokesperson said currently there were about 16,000 workers on the company's rolls. However, the company did not share how much fund it had earmarked for the VRS.
Elaborating on the scheme, the company said, "Generous benefits package will be offered to employees who opt for the scheme, including a monthly payout (Basic + DA) that begins at the date of separation till the employee turns 60 years of age, thus ensuring an assured monthly income as opposed to just a one-time payment of a single amount."
The other provisions under the scheme would entail a medical insurance cover for a period of 10 years post separation, it added.
Tata Motors has been struggling in its domestic operations due to prolonged sales slump both in passenger and commercial vehicles segment.
It reported a net loss of Rs 2,122.72 crore on a standalone basis for the third quarter ending December 31, as against a net profit of Rs 1,251.4 crore in the same period a year ago.
For the April-December period, the company posted a standalone net loss of Rs 3,575 crore, against a profit of Rs 1,151 crore during the same period of previous fiscal.
It's overall profitability has been driven by its British arm Jaguar Land Rover (JLR) but in the quarter ended December 31, 2014, its consolidated net profit dipped by 25.5% drop at Rs 3,581 crore dragged by the loss in domestic business and a marginal dip in JLR's profit.
Tata Motors said its "people initiatives" would extend to all categories of employees, including workmen and the managerial cadres.
"Key focus areas will include productivity benchmarking, cost optimisation and job enrichment, for a more effective and efficient organisational structure aligned to market demand," it added
Tata Motors said the initiatives would complement the strong product portfolio it had announced till 2020, including launch of two new products every year for its passenger vehicle business, and several new products and variants for its commercial vehicles business.
The company's shares ended at Rs 575.50 apiece on the BSE, up 2.73% from previous close.