Nokia has announced voluntary retirement scheme (VRS) for around 6,600 workers currently working at its factory in Chennai, India. The offer will start from April 15 and run through May 14. The Chennai plant is one of Nokia biggest handset manufacturing plants.
Nokia’s plan to transfer the Chennai plant to Microsoft Corp as part of the 5.4 billion euro sale of its handset division was put on hold when Indian tax authorities froze transfer of the asset.
Further the Indian government demanded Nokia to pay £342.4 million ($572.5m) before transferring the plant to Microsoft as a guarantee for tax which it owed to the government. Nokia, however, is yet to agree on the guarantee amount.
The €5.4 billion ($7.4 billion) sale deal of Nokia’s handsets business to Microsoft which was originally announced in September 2013 is expected to close by the end of this month.
The Finland-based company in a statement on Friday said, “As a responsible employer, Nokia is offering a clear financial option for interested factory employees. We feel this package offers the staff a chance to seek new opportunities outside the company based on a firm financial footing.”
“We have set no target for the VRS in terms of the number of employees. All of the employees coming forward are entitled to the package, Nokia notes that staffing at Chennai has historically fluctuated based on demand and number of external employees used, with the current figure at some 6,600 full-time employees.”
The company offers three months’ salary for every completed year of employment (subjected to a maximum of 15 months), along with a sum of around €1,200 for every employee taking up VRS at the factory. For senior workers opting for the scheme, the company grants more than €6,000 in compensation.
