IL&FS cuts nearly 50% staff since October for cost cutting
In its fifth progress report, the firm said the measure has helped reduce its wage bill by nearly 47%.
In its fifth progress report on the group's resolution process and the way forward, submitted to the Mumbai-bench of the National Company Law Tribunal (NCLT), the company said that the measure has helped reduce its wage bill by nearly 47 per cent.
"The manpower optimisation initiatives which have been implemented across the group have cumulatively resulted in head count decrease of 43 per cent between October 1, 2018, and June 30, 2019, leading to a saving of nearly 47 per cent in the annualised wage bill," it said.
As per the fourth progress report submitted earlier to the tribunal, the new board headed by Uday Kotak had conceptualised manpower optimisation measures for the infrastructure lending major in two phases.
"Phase-I contemplates on initiatives on salary rationalisation of employees, separation of superannuated consultants, and phase-II initiatives include talent restructuring, amalgamation of roles and responsibilities etc," said the affidavit quoting the fourth report.
As per the fourth report, phase-I of "manpower optimisation" measures have been completed for four verticals of the group.
The latest progress report says that the board has identified redundant roles and functions in respect of eight more verticals or entities, including IL& FS, ITNL, IFIN, IL& FS Energy Development Company and IL& FSEngineering and Construction Company Ltd (IECCL).
"The approach used for rationalisation of manpower in these entities involved undertaking an assessment of viability and continuation of projects being undertaken by these business verticals," said the fifth progress report.
In the case of IECCL, the manpower on the rolls of the company has reduced by 57 per cent from October 2018 to June 2019, leading to a reduction of the wage bill by 58 per cent. Apart from the manpower on the rolls, cost of contract staff at IECCL has reduced by 90 during the period, the report added.
The IL& FS board has also started the Phase-II of the initiative in the four entities which have completed the first phase.