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Maruti cuts 19% workforce through VRS

Maruti Udyog Ltd, India's largest car maker, has shed about 19 per cent of its over 5,000-strong workforce in last one month through a voluntary retirement scheme, company officials said on Tuesday.

"We have brought our workforce down by 1,050 workers from 5,646 to 4,596 workers. Nearly 19 per cent of the workers have opted for the VRS, of which 24 per cent are unionised workers," the officials said in New Delhi.

"On an average, Rs 650,000 will be paid to each worker, depending on the seniority and position. The total financial outgo would be Rs 674 million," they said, addding the VRS closed on October 23.

They said the workers would be paid a package of 15 days-three months of their salary for each year served in the company, besides two years of salary after the VRS.

"The entire pay-back period would be less than three years which is very attractive," the officials added.

They said 90 per cent or 993 workers opting for the VRS were from the Maruti employees' union while the remaining 57 workers were supervisors, managers and executives.

"But, even by reducing more than 1,000 workers, we will able to increase our production capacity utilisation to 120 per cent from the current 98-100 per cent," they said, adding the VRS would help to reduce the cost to the company of each worker which currently stands at about Rs 22,000 per month.

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