Facing financial crisis, Vallabh Vidyanagar-based material handling equipment (MHE) and engineering major, Elecon Engineering Company Ltd, has decided to trim its employee strength to survive remain afloat. Insiders claimed that the company has asked over 400 workers including senior engineers from different departments within the Elecon Group of Companies, to resign.
This was communicated to the workers through a letter written early this month by the group chairman and managing director, Prayasvin Patel. "Today we are standing at the threshold of excess human resources vis-a-vis our business. At this critical juncture, we don't have any option but to trim the strength to keep the business afloat in tune with the global market scenario," Patel wrote in the letter.
Expressing pain and helplessness over the lay-offs, he further said, "Some of our colleagues would be asked to part with from the organisation, keeping in mind the survival of the business. I am deeply disheartened while taking this decision."
An emailed query to the company regarding this, did not elicit any response. Also, the calls made to the chairman went unanswered. There are over 2500-3000 employees in the engineering firm.
"There have been several lay-offs within the group recently. I cannot give the exact number. The decision is taken by management, hence I don't know the reason behind it," said a senior official of the company on condition of anonymity.
The employees claimed that those, who have been asked to leave include design engineers, production engineers and technical engineers besides workers.
Those who have been asked to leave, include those on probation as well as those who have served the company for over 10 years.
Going by the claims made by employees, the company has asked them to resign stating 'personal reasons'. "They are not going to give us termination order. They have not even written anything through HR department. They convened a meeting of our department heads and gave them a list of people who are to be sacked from their respective departments," said one of the employees, who has been asked to resign.
Sources said, the company has been facing slowdown for some time now.
The company has very less pending orders and it is facing critical financial condition, they said claiming that Patel had communicated to the employees about the worsening condition of the group. Elecon, over the last few years had strengthened its human resource capability keeping in mind the expansion plans of the Elecon Group of Companies.
The company had posted net profit in the June quarter at Rs 3.25 crore, almost 50 per cent down from Rs 6.4 crore in the same period last year.
Net income fell by over 55 per cent at Rs 104 crore for the quarter against Rs 232 crore in the corresponding quarter last year.
The company shares ended over 5 per cent down on the Bombay Stock Exchange (BSE) on Monday to close at Rs 23.65. Elecon shares have lost over 30 per cent in past three months.
