Home/ Companies / News/  Air India aims to slash staff count by 2,000 in 2nd VRS

Air India is looking to bring its permanent employee count down by another 2,000 with the Voluntary Retirement Scheme (VRS) announced last week. The airline has set aside 200 crore as part of the initiative, senior Air India executives said.

In June 2022, around 1,500 employees availed the first VRS offer under the new management, following the takeover of the national carrier by the Tatas. When the government sold the carrier to Tata Sons it had over 8,000 permanent employees.

“It will cost over 200 crore if all the 2,000 eligible employees avail the second VRS offer," an executive said, seeking anonymity.

Last week, Air India announced the second round of VRS, and offered it to permanent general cadre officers who are at least 40 years old, and have completed at least five years of continuous service, including unskilled and clerical employees.

On 4 November, Mint reported that the airline is planning to introduce a second VRS to bring down employee costs and pave the way for a younger workforce. The airline has made the scheme more lucrative by offering employees applying for voluntary retirement between 17 March and 30 April an ex-gratia amount as a one-time benefit. Eligible employees who apply before 31 March will get 1 lakh over and above the ex-gratia payment.

Of the 1,500 employees offered VRS in the first round, about 150, primarily cabin crew, have not yet been relieved of their duties.

At the time of its privatization in January 2022, the airline had 8,084 permanent employees, with 5,000 slated to retire over five years.

Email query to Air India did not elicit any response till press time.

This time, the response to the VRS is expected to be far better than the last time since a large number of Air India employees are ready to opt for it. “Many employees, who are in their 50s, are likely to opt for the scheme. Relatively younger employees may want to stick around," said another senior employee, who is eligible, and has few years of service left.

Tata Group-owned Air India, under its transformation plan, has been looking to add new talent in the organization, to bring about a transformation. It plans to achieve accelerated growth for in domestic and international aviation markets, and is also trying to reduce the multiplicity of roles and bring in more efficiency for its employees.

In terms of expansion, Air India aims to have a 30% share in both domestic and international markets within five years. At present, it has a domestic share of 10% and 12% in the international market.

The airline recently placed a mammoth order for 470 aircraft with the option to extend the order size to 840 as part of its expansion plan.

Meanwhile, PTI reported that Air India is revising its policy with respect to privilege leaves for both permanent and full-term contract staff from the next financial year to align the policy with “prevailing market conditions", it said in an internal communication on Wednesday. 1 April onwards, privilege leaves accumulation limit for all employees will be 60 days in a particular financial year, it added.

An official close to the development said under the revised policy, an employee can accumulate up to 60 days of PLs at the end of a fiscal year or encash the PLs. It is also putting in place a new leave policy. “We are reviewing our leave policy to align it with prevailing market practices. As part of the process, PL accumulation and encashment are being revised," chief human resources officer Suresh Dutt Tripathi said in the note.

With inputs from PTI.

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Updated: 23 Mar 2023, 06:30 AM IST
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