Hero MotoCorp, a leading manufacturer of two-wheelers, has announced a voluntary retirement scheme (VRS) for its employees, according to an exchange filing on Wednesday. The move will impact its staff members, but not workers at any of its factories.
The announcement comes just days after the company promoted its former chief financial officer Niranjan Gupta as its chief executive officer, taking over from Pawan Munjal, who now continues as the chairman of the company. Hero MotoCorp has appointed a new chief technology officer (CTO), a chief growth officer (CGO) and now a new CFO — all in the span of just over a year.
As of March 2022, the company had 9,173 employees on its rolls.
By “consolidating roles and reducing layers, Hero MotoCorp hopes to increase empowerment and agility, leading to improved efficiency and productivity within the company”, it said in the filing to exchanges.
Hero MotoCorp is going for a fresh start at a time it is struggling to hold its market share in the two-wheeler segment and as competition in the electric vehicle space intensifies.
It now plans to ramp up the production and distribution of its maiden EV under its clean mobility brand Vida.
The VRS is applicable to all staff members and offers a “generous package that includes several benefits, such as a one-time lump-sum amount, variable pay, gifts, medical coverage, retention of the company car, relocation assistance, and career support”, Hero MotoCorp said.
The company last offered a VRS to its employees in 2019.
“Restructuring its professional layers is a requirement for Hero MotoCorp if it wants to achieve a clean slate. The company was being run a certain way for the last two-three decades, but now its succession plan and the business’s requirements necessitate giving more control to the newly inducted layer of chief executives,” an industry executive told Mint, requesting anonymity.
The two-wheeler industry has witnessed an improvement in consumer sentiment, Hero MotoCorp said, adding that the industry expects these factors to contribute towards double-digit growth in the current financial year.
On Saturday, Hero MotoCorp reported higher sales in March at 519,342 units compared to 450,154 units sold the previous year. Domestic sales were up at 502,730 units from 415,764 units a year ago, while exports reduced to 16,612 units from 34,390 units.
Shares of Hero MotoCorp ended slightly higher at ₹2432.20 apiece on the National Stock Exchange.
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