Chennai-based commercial vehicle major Ashok Leyland Ltd, a part of the Hinduja Group, on Friday said that the companyâ€™s board has approved the introduction of Voluntary Retirement Scheme (VRS) for all eligible employees of the company. The VRS will be implemented over a period of nine months at the company offices/ factory locations. As per reports, 5,700 employees are eligible to opt for the scheme. Upon implementation and execution, this exercise will help optimise the capacity and resources of the company, it said in a regulatory filing.
This is the second time the company has introduced VRS after it reportedly announced an employee separation scheme in 2019, which targeted non-performers and employees that had over 20-25 years with the company and saw around 200 employees opting for it.
This round of VRS, however, is reportedly more of a restructuring exercise and will cover employees with one to 32 years of experience with the company across all functions. According to a Business Standard report, the longer a person has been with the company, the higher the pay-out will be. For example, those who have worked with Ashok Leyland for five years will get one month salary for five months, while those with more than five years will get half a monthâ€™s salary for the number of years they have been with the company.
Apart from the VRS scheme, the company also announced that it has floated a wholly-owned subsidiary to build bus bodies and coaches. In a regulatory filing, the company said it has invested Rs 60 crore in the equity of the subsidiary, Vishwa Buses and Coaches Ltd, and the company is yet to start commercial operations.
For the July-September quarter, the company posted a loss of Rs 147 crore as revenue declined 28% to Rs 2,837 crore on the back of weak demand for commercial vehicles amid the COVID-19 pandemic. In the previous quarter, the commercial vehicle maker reported a loss of Rs 389 crore with an 89% decline in revenue