L&T To Shed Flab, Retire 1,400 Staffers

Mumbai, July 24: | Updated: Jul 25 2002, 05:30am hrs
In a major manpower rationalisation exercise, Larsen & Toubro (L&T) has implemented what is being seen by employees as a “compulsory” retirement scheme across all its facilities around the country. The company has asked 1,400 personnel, both managerial and non-managerial, to avail of the facility. Employees have been given separation dates by which they have been asked to leave.

L&T has implemented this scheme across its offices and factory facilities.

The company had, in the recent past, undertaken a study to identify role redundancies in the organisation. However, the total outgo on account of this round of separation is not known. The company has, however, said the current round of separation was a Voluntary Retirement Scheme (VRS) and not a compulsory retirement scheme.

In a faxed response to queries from FE, L&T has said the restructuring of businesses resulting in redundancies of roles and the increasing need for better business performance and productivity for value creation has made the step necessary. These measures were necessary to cope with the pressures of an adverse business environment, the company added.

L&T has also said the company was giving a reasonable VRS compensation which would help employees rehabilitate themselves financially, for an alternative calling. The company is also working out a medical insurance policy through an insurance company, for eligible exiting non-unionised employees and their families.

The company has also said quite a few managerial and other eligible employees, who have availed the company’s VRS in 2002, have also been given an opportunity of receiving pension at the present levels, from annuities bought from their superannuation fund accumulations, which were dropping.

L&T, had in its annual report, admitted that with the increasing proportion of knowledge-based businesses in the company’s portfolio, it was becoming difficult to attract talent into the organisation.