MUMBAI: In the first major move under N Chandrasekaran’s chairmanship, Tata Motors is reducing staff by offering a voluntary retirement scheme (VRS).
The company , which is shrinking its management from 14 levels to five, is targeting 400-500 executives through the scheme. This is perhaps the biggest white-collar workforce rationalisation to be undertaken by the over seven-decade-old company.
Tata Motors, a unit of the $104-billion Tata Group, had 26,569 people on its rolls in fiscal 2016. The break-up between its white-collar executives and blue-collar workforce couldn’t be ascertained.
The company , the country’s largest automaker by revenues, has been offering VRS on and off to its employees, with the last one being taken up by 250-odd factory workers in 2015-16. That year, it had incurred an employee separation cost of Rs 10 crore.
Tata Motors is now resorting to this extreme step again to reduce costs and to streamline its operations after losses widened at its local unit. The new organisational layer of five levels will kick in from next month.
The company has identified 120 roles in the top two levels, while it is in the process of ascertaining positions for the next three levels. This is part of Tata Motors’ transformational journey to make the organisation lean and agile.
The management restructuring and VRS proposal was approved by the board of directors last month. Chandrasekaran was appointed chairman of Tata Motors in January. Some of the middle-level executives will be assigned new job responsibilities and relocated to its global development centre (GDC) in Pune.
This centre offers shared services in a host of areas such as finance and data analytics. “As part of the restructuring, we have identified roles that are best located in a central, common service structure, providing services across the company through optimised and efficient processes,” said a Tata Motors spokesperson.
He added, “A number of roles distributed currently across the country are being relocated in the GDC.We expect significant benefits in cost, and process efficiencies.”