Tata Motors to launch VRS to reduce staff costs

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Tata Motors will offer voluntary retirement scheme to trim staff costs as part of restructuring although the number of employees that will be offered the option is still being worked out.

Tata Motors confirms that as part of the on-going organisation effectiveness project, where we have already finalised the top two levels (L1-L2) of our management structure, a proposal on VRS package has been presented and approved by the board, a Tata Motors Spokesperson said in an emailed statement.

While it has been speculated that the number of employees to be offered VRS could be around 500, the spokesperson declined to confirm saying it is still in discussion stage. Since the exercise for selecting L3-L5 (levels) is still underway, it is premature for us to comment on any other specifics at this point of time, the spokesperson added.

The spokesperson said: As part of the restructuring, we have also identified roles, which are best located in a central, common service structure, providing service across the company through optimised and efficient processes. To facilitate this, number of roles distributed currently across the company are being relocated in the GDC (Global Delivery Centre).

Earlier this month, Tata Motors said that it is in talks with the world's largest auto maker Volkswagen for a possible partnership.
The company is exploring various opportunities, including partnership in its new advanced modular platform (AMP) development, possibilities of a joint venture or a contract manufacturing with the German auto major, in its bid to scale up.

Explaining the rationale behind such a move, Tata Motors CEO & MD Guenter Butschek said although the company has set sights on becoming among the top three passenger vehicle makers in India by 2019, it might not be enough to get the scale up effects.

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