Hindustan Lever Limited (HLL) has asked 250 workers at its Sewree factory not to report for work for a period of one year. The move is aimed at rationalising the work force that is said to have a surplus of 600 employees.
HLL is the largest consumer products company in India. HLL's business portfolio comprises soaps, detergents, personal products, food products and frozen desserts. Modern Foods Limited has a network of 14 bread manufacturing units and a comprehensive distribution network comprising 22 operating franchisee units.
According to the company, the burden of supporting the idle employees amounts to Rs 70 m per annum. Measures to relocate them to other plants and centres had earlier been thwarted by the unions.
HLL's decision is aimed at improving employee productivity in a scenario where topline (in volume terms) growth has been far below normal. Moreover, in view of the intense competition in the industry, the company is unable to hike prices to generate growth. It is therefore trying to cut costs in an effort to boost margins that will then generate bottomline growth.
The company's decision has however not settled well with the unions. In case the differences are not sorted out, HLL could face the prospects of an employee agitation. This would not augur well for the company.
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