Tata Motors rolled out a voluntary retirement scheme last month after worker unions pushed for it across the company’s factories, as per a report. Only a section of eligible employees in its passenger and commercial vehicle businesses opted for the offer. 

According to a report in The Economic Times, the scheme ran from April 10 to April 30 and covered permanent staff aged 40 to 55, with around 750 employees falling within its scope, according to multiple sources.

This was the automaker’s first such exercise since its split in October 2025 into two listed entities for its passenger and commercial vehicle businesses. The demerged commercial vehicle business was listed as a separate company last November. Despite the unions’ push, only 275 to 300 employees are estimated to have availed of the scheme, the report added. Tata Motors had 58,442 employees at the end of FY25.

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This was Tata Motors’ third VRS in about four years.

The compensation structure was fixed by age, the report added. Employees aged 40 to 45 with at least 10 years of service were entitled to about 80 per cent of their last drawn salary, including basic pay and dearness allowance. Those in the 45 to 50 age group were eligible for around 90 per cent, while employees aged 50 to 55 could receive up to 100 per cent, it said. 

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One distinguishing feature of Tata Motors’ VRS was the payment flexibility. Employees could choose a monthly payout until they turned 60 or opt for a lump-sum settlement, either as a full and final payment or in staggered tranches.

Beyond the base payout, the scheme included medical benefits for up to 10 years, along with settlement of provident fund, gratuity, leave encashment and leave travel allowance. In some cases, provisions of up to ₹1 lakh to ₹1.5 lakh in medical support and limited family support in the event of death were also included, it added. Pension benefits will be in line with EPFO norms. The company also added a group incentive component, with an additional payout of ₹50,000 to ₹1.48 lakh depending on overall participation levels, to encourage employees to opt in collectively.

Published on: May 8, 2026 11:37 AM IST