Tata Motors, the largest manufacturer in the Indian automotive industry, is planning a big organisational restructuring, sources tell CNBC-TV18.
This could be part of its move to bring down the costs of its white collar workforce by initiating a voluntary restructuring mechanism.
Tata Motors' fresh new package will be offered to around 500 executives. This scheme, which will be effective from April 1, 2017, is likely to include one-year salary with medical benefits.
The board of the company has cleared this VRS package, which was presented to it some time ago.
Company's spokesperson also confirmed the news but did not give any details on the restructuring project.
The one time settlement or the VRS package is part of Tata Motors 'organisation effectiveness project'. Last year the company had taken a massive restructuring exercise to bring down its management levels from 12-13 to five.
This VRS package is meant for those who wouldn’t be included in the new management structure and for whom a new vertical will be created. This vertical is likely to be called the global development centre.
Research analyst Ashwin Patil of LKP Securities said, "This is a one-time cost but it will help the company in improving its margins."To know more, watch video...