Foxconn India to begin layoffs after voluntary retirement scheme

CITU objects Foxconn India, recently renamed FIH India, announced to its employees on Friday that it is “considering layoffs/retrenchment”, just two days after the company offered a voluntary retirement scheme (VRS) that would be valid till June 20.

ET had written about the company’s VRS plans on June 3, 2014, and this is the first time Foxconn is making it official. The company put up a circular on this on the notice board at its facility in Chennai.

“Due to the company’s continuous fall in business and fall in production and because of the acuteness of the situation and with no other way to manage the situation, the company will take necessary actions in accordance with the law. Because of having been pushed to this situation, we would like to convey to all the operators that the management is considering to approach the government to opt for layoff/retrenchment options,” it read.

On June 16, the management of FIH India had a meeting with the Assistant Commissioner of Labour in Sriperumbudur, the area in which the company is located.

“They (FIH India) have given a petition to the government to reduce their workforce by 600 employees. CITU has objected to it,” said S Kannan, district president of Kancheepuram, Centre of Indian Trade Unions (CITU). “We have urged the government not to accept it.”

Copies of the layoffs/retrenchment announcement and VRS circulars are available with ET.

In a letter dated May 12, 2014, which is addressed to the principal secretary of Tamil Nadu’s Labour and Industrial Ministry, a copy of which is also available with ET, the company said it is “the main supplier to Nokia” and “in India, our business is substantially dependent on Nokia, Sriperumbudur plant”.

Nokia India is cutting down its production and manpower in the plant, which has affected FIH India’s operations.

“Under these circumstances, we are also compelled to downsize our manpower substantially to suit the current requirements of our customer. Besides this, we also understand that future order status is also uncertain with Nokia given their re-defined business model with global customers,” said the letter.


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