L&T initiates CRS for senior staff

Sambit Datta

Mumbai, July 17: Close on the heels of the proposed divestment of a 37.5 per cent stake in Larsen & Toubro Ltd’s to-be-demerged cement division to a strategic partner, the management of the company is understood to have adopted a manpower rationalisation measure by floating Compulsory Retirement Scheme (CRS) for select employees.

Several faxed messages forwarded to the company failed to elicit any response. However, a company spokesperson said: “L&T is offering CRS to its employees, but the scheme is meant only for higher officials and managers of the company. This is a total internal restructuring process and confidentiality will be maintained”.

The company has already implemented the scheme for its employees at Powai unit. Indications are there for extending the scheme for other units as well. The move is aimed at reducing and optimising the excess manpower and thereby improving operational efficiencies.

According to an analyst, “The rationale behind the decision may be it would offer a better valuation to the company’s 16 million tonne cement business.” The company’s staff expenses have increased by nine per cent from Rs 541 crore in 1999-2000 to Rs 588 crore in 2000-2001.

The provision for company’s contribution to gratuity fund and leave encashment liabilities increased to be in line with falling interest rate scenario. The rest of the increase was due to normal increase in salaries and wages, other employee- related expenses and payment made under voluntary retirement/voluntary-cum-pension schemes for certain employees at Mumbai.