Tata Motors gets going on restructuring, rolls out VRS

Tata Motors is going ahead with plans to initiate a restructuring drive of its human resources, aimed at turning it into a leaner organisation with a flat hierarchical structure.

The company is moving from a heavy 15-16-level hierarchy to a flat five-level in a bid to cut down on excess staffing and increase accountability.

As per a Business Standard report, it is understood that around 500 executives have been offered a voluntary retirement scheme (VRS) which includes a year’s salary along with other benefits.   

To a query from the newspaper, a company spokesperson said: "Tata Motors confirms that as part of the ongoing organisation effectiveness project, where we have already finalised the top two levels of our management structure, a proposal on VRS package has been presented and approved by the board. Since the exercise for selecting L3-L5 is still underway, it is premature for us to comment on any other specifics at this point in time.”

As per the newspaper report, Tata Motors earlier had three levels in the supervisory grade, five in the managerial grade and around six or seven in the executive grade. Now, there will be five grades, L1 to L5, with L1 being the highest. Above these levels, there will be executive directors, presidents and the managing director. The exercise has been completed only for the L1 and L2 levels. 

“As part of the restructuring, we have also identified roles, which are best located in a central, common service structure, providing service across the company through optimised and efficient processes. To facilitate this, the number of roles distributed currently across the company is being relocated in the Global Development Centre in Pune. We expect significant benefits in cost, service quality and process efficiencies,” the spokesperson said.