Commercial vehicle major Ashok Leyland on Friday announced Voluntary Retirement Scheme (VRS) for permanent employees across its offices and factories. This is the second time the company announced VRS in the past two years.
N V Balachandar, president (HR, CSR, and Communications) of Ashok Leyland, said the scheme would help the company create a more cost-effective and efficient organisational structure.
The current landscape of the global pandemic provides scope for people to pursue flexible career opportunities and this will provide a window for the same, he said. “There have been many requests from employees for early retirement, and this scheme provides them with a viable exit,” he said.
In 2019, when the company announced VRS/ESS (Employee Separation Scheme), the target was mostly non-performers and the people who had over 20-25 years. Nearly 200 people opted for the scheme. This year, the VRS will cover people who have one-year experience to 32 years across all functions. “This is more a restructuring exercise,” said Bala.
The VRS will be implemented over a period of nine months at the company offices/factory locations.
The higher the tenure will be the higher payout. If an employee completed five years in the company, he or she will get one month of salary for five months; if the tenure is more than five years, the employee will get half a month salary for the service term.
Last year, the company had offered two months’ fixed pay for each completed year of service for employees with 15 years of tenure. For those who had completed between five and 10 years, it was offering one month of fixed pay.
Ashok Leyland has posted a loss of Rs 147 crore during the September quarter, against a profit of Rs 39 crore in the year-ago quarter. Revenue from operations during the last quarter is at Rs 2,837 crore, down 28 per cent YoY. The company’s revenue in Q2FY20 was at Rs 3,930 crore.
Company’s 2019-20 annual report stated that employee expenses were lower by about 23 per cent to Rs 16,15.06 crore from Rs 2,098.77 crore, reflecting the reduction in bonus and performance payments consequent to 45 per cent in sale volumes.
By the end of 2019-20, the company had 11,436 permanent employees. It had 12,133 employees a year ago, and 15,812 in in 2010-11.