The scheme announced late April to the employees as a part of the second round of restructuring aims at cutting staff strength across all divisions of the Tata group company.

The company proposes to offer voluntary retirement scheme (VRS) to as many as 1,700 employees during the next two years in an effort to reduce flab.

Voltas managing director ND Khurody had announced intention to offer separation package to over 1,700 people employed as general staff in mid-February as part of the restructuring exercise aimed at cutting costs.

The separation package is being offered to employees who have completed over 10 years of uninterrupted service with company. Each employee opting for the scheme is set to receive Rs 4-5 lakh depending on the number of years of experience.

Voltas India sources said that the State Bank of India has agreed to finance the package.

In thenext round of VRS, the company is expected to offer a similiar separation package to another lot of 500 employees and the balance 700 employees targetted for the scheme would be offered a package before 2001.

The second round of restructuring set in place will involve closing down of six branches and outsourcing of some business activities, besides a cut in employee strength.

In the previous round of restructuring set rolling after Khurody took over as the managing director, the loss-making company had hived off its white goods division manufacturing refrigerators and washing machines as joint venture company to Swedish white major Electrolux. It has also sold its agro chemicals division to Rallis.

The larger objective of the restructuring was to take the company back to core areas of strength--engineering and engineering services.

It is understood that the company is looking for buyers or joint venture partners for some of its subsidiary companies which are not operating in the core areas ofstrength.

Voltas had slipped into the red in 1996-97, and made further losses in the following year. The company is expected to break even in this financial year.