Huge response for VRS at Glaxo (I) Worli unit

Kailash Rajwadkar

Mumbai, Aug 21: ROUGHLY 627 employees at Glaxo (India)’s Worli unit have opted for the company’s voluntary retirement scheme (VRS). The scheme which continues till September 4 saw around 54 employees opting for the VRS on Tuesday, the last day to qualify for the company’s early bird incentive scheme.

Union sources said that all except one employee at the Worli plant, and around 105 out of the 165 office staff at the unit opted for the VRS (the office staff is not entitled for any early bird benefits). No official confirmation could, however, be got on these figures.

Though company officials were reluctant to comment on the VRS costs due to a large variable component associated with the balance years of service varying in the case of each employee, analysts tracking the sector said that it would cost around Rs 30 crore in addition to the hospitalisation benefits which cannot be quantified.

Analysts said that considering the savings in staff costs of around Rs 9 crore per annum post-VRS, the discounted pay-back period on the cost incurred for VRS along with hospitalisation expenses should be around four years.

Glaxo India had offered to pay the premia on a hospitalisation benefit scheme that will be valid for 20 years or the age of 60, whichever is earlier. It will provide a cover of up to Rs 1 lakh per annum to the employee, his or her spouse and two dependent children. On the possible closure of the Worli plant, company officials declined to comment but said that the current manufacturing schedule has been drawn till October 31, 2001. However, union sources at the Worli unit claimed that the plant will be gradually be wound down after October end, when the VRS would be implemented. Analysts claimed that the company has increased its production capacity at its Nashik plant as well as at the plant of Burroughs Wellcome and hence normal production activity at the company will not be disrupted.