The Pune-based Thermax has said that about 250 employees from the middle level management cadres and administrative support staff have opted for the voluntary retirement scheme (VRS), which ended today. The company has decided to accept most of these applications.
The company had launched the VRS on August 6 for its staff, professional and management grade employees, although very senior executives were kept out of the offer. The VRS is part of the company's extensive cost cutting efforts, which also includes reduction of material and manufacturing costs 'on a sustained basis.'
Following the VRS, which will cost the company around Rs 10 crore, Thermax' staff strength will come down to around 1,100 employees.
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The scheme, which had two variants, was open to employees who were aged over 40 years, had completed or with 10 years of completed service in the company's or employees up to the age of 40 years. The maximum compensation under the scheme was Rs 6.25 crore.
The VRS was announced with a view to reduce the company's wage bill, which was around Rs 65 crore, or 14 per cent of its turnover. The VRS is expected to reduce the company's wage bill by Rs 2-3 crore. Thermax had posted losses of Rs 1.65 crore during the first quarter of this fiscal on a turnover of Rs 83.63 crore. During the previous fiscal, the company's losses stood at Rs 13.2 crore.