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Automaker Tata Motors is terming an early retirement offer (ERO) it has announced for employees, a measure to “right size” the organisation in line with today’s business realities.
It also has no plans to replace the personnel who opt for the offer, it has said.
The move comes on the heels of a staggering loss of Rs 804 crore the company posted for the second quarter of this fiscal. The third-quarter results are yet to be announced.
The past few weeks have seen several managers at its Pune plant — most of them in the 50-plus age group — receive retirement offer letters. The normal retirement age in the company is 60 years.
According to an employee, the company expects to cut the headcount across all its plants by 700-800 by the end of the exercise.
Responding to a query from Business Line , a company spokesperson said: “Tata Motors has announced an early retirement offer that serves the dual purpose of offering an option of early retirement to those who want to avail it to pursue other interests, and also address our concerns on headcount and cost.
“The process will offer long-term benefits to the company through a calibration of roles, with no back-filling or replacements of positions arising out of early retirements.”
Open for a limited period, the offer is likely to end by month-end.
“The specific modalities on their date of relieving will be worked out based on internal business requirements,” the spokesperson said.
This is an attempt to right-size the organisation in line with the business realities and there are no internal targets on the numbers, the spokesperson added.
The company has maintained that the re-aligning of its manpower plans with near-term goals is not age-specific, though there are some tenure-related parameters.
Over the past 10-12 years, the automaker has announced voluntary retirement schemes (VRS) in limited measures. The scale of the present ERO, which is different from VRS in its operational modalities and comes with additional benefits including medical and other post-retirement support, has, however, cast a shadow of gloom among senior employees.
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