BPL Ltd and its associate companies employ a total of 7,000 people (2200 in BPL Ltd alone). In 2001, the company had a total of 10,000 employees prior to the downsizing exercise.
According to the company, the salary delay was expected to be a temporary situation till the restructuring process reached fruition in the next two months. Speaking to FE, BPL Ltd senior vice-president and head (corporate HR and customer care) HN Shrinivas said this was because the company was operating on a tight payment schedule.
We accept that the company is in a tough position at the moment and cash flows are tight. But we expect the shortfall to be ironed out once the restructuring exercise is in place and the debt servicing position is bettered, Mr Shrinivas said.
While employees sources across BPL group companies like BPL Engineering and BPL Refrigeration confirmed that salaries were being delayed, some said that certain higher level managers payments were delayed even beyond 30 days. There is also talk of more lay-offs among employees in manufacturing units.
As a company, we were never interested in looking at lay-offs, but the market has forced us to carry out a downsizing exercise. While we cannot comment specifically about further restructuring, we do believe that there will be need to re-size if the situation demands, Mr Shrinivas said.
Meanwhile, as part of its mega restructuring exercise, BPL Ltd is eyeing the external commercial borrowing route to bring down the companys debt servicing costs, according to market sources. The company currently service debts amounting to over Rs 800 crore.