Tata Motors floats VRS scheme to bring control in fixed costs

In its bid to rein in fixed costs and implement the turnaround plans effectively,Tata Motors has floated a voluntary retirement scheme. This is the third time in four years that the company has floated a VRS scheme.

The scheme announced yesterday will be applicable to all the permanent employees and those employed at the plants, said a source who knows the inside out of the company.

 “Tata Motors continues to implement its turnaround plans effectively. Towards this, we are also reviewing cost structures proactively while ensuring that our commitment towards employee welfare and well being remains foremost,” read an email sent to the employees on 11 December.

“As a first step and in response to requests of the employees, we are announcing a VRS for permanent employees and workers,” it said. The scheme provides to all those eligible to apply and to avail early retirement by drawing certain compensation and benefits, said the email. The compensation and benefits being offered under the scheme are among the best in the industry and includes health insurance as well as guidance on financial and retirement planning, it added.

Tata Motors joins other auto firms including Hero MotoCorp, Toyota Kirloskar Motors and Ashok Leyland that had implemented similar schemes to shave off costs amid a protracted slowdown that has been heightened by the Covid-19 pandemic.

The scheme will be open till 9 January.