Tata Motors is expected to launch a new voluntary retirement scheme (VRS) to bring down costs.
A spokesperson of Tata Motors, in the report, said that the voluntary retirement scheme is a part of the on-going “organisation effectiveness” project, approved by the board. While they expect significant benefits in cost, service quality and process efficiencies, the company spokesperson further said it was premature for them to comment on any other specifics at this point in time.
At the end of February Tata Motors had announced a VRS for aging staff across its plants and managerial staff. The VRS plan would be offered to the staff aged above 40 as part of its drive to improve competitiveness and for cost cutting.
It is expected that this scheme would be applicable to about 4,500 to 5,000 employees across the country and 2,000 employees may opt for it.
The VRS scheme offered a retired employee to get a monthly pay of basic salary plus dearness allowance from the date of separation till the age of 60 years. Besides this the employee will get medical insurance cover for 10 years post parting with the company.
These are in addition to normal retirement benefits such as PF, gratuity and superannuation, Tata Motors said in a statement on BSE on February 28.