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Ashok Leyland starts VRS scheme second time in two years amid COVID-19 pandemic – Mint

Ashok Leyland, a Hinduja Group flagship, said on Saturday that it has started a Voluntary Retirement Scheme (VRS) for its employees. Its board of directors, at a meeting held on 6 November, approved the scheme, Ashok Leyland said in a BSE filing. The VRS scheme is open for all those who have completed a minimum one year service with the organisation. The scheme will be implemented over a period of nine months, the company said.

“Upon implementation and execution, the VRS would help optimise the capacity and resources of the company,” the heavy vehicles-maker said in the filing.

“The current landscape of the global pandemic provides scope for people to pursue flexible career opportunities and this will provide a window for the same,” said N V Balachandar – President HR, CSR and Communication. “There have been many requests from employees for early retirement, and this scheme provides them with a viable exit,” he added.

Last year, Ashok Leyland introduced two schemes — a Voluntary Retirement Scheme and an Employee Separation Scheme (ESS) for those employees not eligible for VRS. Under the ESS, compensation payable to an executive under ‘A’ category will be 30 lakh or lower, while in the ‘B’ category, it will be 60 lakh and above. “An executive who opts for separation under ESS will be eligible for a lump sum compensation”, the company said.

The auto major posted a net loss of 147 crore in the second quarter ended September due to weak demand for commercial vehicles in the wake of the pandemic. Revenue during the quarter under review fell to 2,837 crore. Commenting on the performance in the second quarter, Ashok Leyland Ltd managing director and chief executive officer Vipin Sondhi said: “While the challenges in the market due to COVID-19 continue, the company has seen a marked improvement in the company’s performance in this quarter.”

It reported 1% increase in total commercial vehicle sales at 9,989 units in October. Domestic sales declined 2% to 8,885 units in October, the company said. Total heavy and medium commercial vehicle sales were down 11% at 4,588 units last month. The slowdown in the automotive industry and COVID-19 pandemic forced many manufacturers to downsize employees.

Ashok Leyland also announced that it has floated a wholly-owned subsidiary to build bus bodies and coaches. The company said in a regulatory filing that it has invested 60 crore in the equity of the subsidiary, Vishwa Buses and Coaches Ltd, and the company is yet to start commercial operations.

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