Ashok Leyland starts VRS scheme second time in two years amid COVID-19 pandemic2 min read . Updated: 21 Nov 2020, 06:36 PM IST
- Ashok Leyland board of directors, at a meeting held on 6 November, approved the VRS scheme
- The company posted a net loss of ₹147 crore in the September quarter due to weak demand for commercial vehicles in the wake of the pandemic
Ashok Leyland, a Hinduja Group flagship, said on Saturday that it has started a Voluntary Retirement Scheme (VRS) for its employees. Its board of directors, at a meeting held on 6 November, approved the scheme, Ashok Leyland said in a BSE filing. The VRS scheme is open for all those who have completed a minimum one year service with the organisation. The scheme will be implemented over a period of nine months, the company said.
"Upon implementation and execution, the VRS would help optimise the capacity and resources of the company," the heavy vehicles-maker said in the filing.
"The current landscape of the global pandemic provides scope for people to pursue flexible career opportunities and this will provide a window for the same," said N V Balachandar – President HR, CSR and Communication. “There have been many requests from employees for early retirement, and this scheme provides them with a viable exit," he added.
Last year, Ashok Leyland introduced two schemes — a Voluntary Retirement Scheme and an Employee Separation Scheme (ESS) for those employees not eligible for VRS. Under the ESS, compensation payable to an executive under 'A' category will be ₹30 lakh or lower, while in the 'B' category, it will be ₹60 lakh and above. "An executive who opts for separation under ESS will be eligible for a lump sum compensation", the company said.
The auto major posted a net loss of ₹147 crore in the second quarter ended September due to weak demand for commercial vehicles in the wake of the pandemic. Revenue during the quarter under review fell to ₹2,837 crore. Commenting on the performance in the second quarter, Ashok Leyland Ltd managing director and chief executive officer Vipin Sondhi said: "While the challenges in the market due to COVID-19 continue, the company has seen a marked improvement in the company's performance in this quarter."
It reported 1% increase in total commercial vehicle sales at 9,989 units in October. Domestic sales declined 2% to 8,885 units in October, the company said. Total heavy and medium commercial vehicle sales were down 11% at 4,588 units last month. The slowdown in the automotive industry and COVID-19 pandemic forced many manufacturers to downsize employees.
Ashok Leyland also announced that it has floated a wholly-owned subsidiary to build bus bodies and coaches. The company said in a regulatory filing that it has invested ₹60 crore in the equity of the subsidiary, Vishwa Buses and Coaches Ltd, and the company is yet to start commercial operations.