nokia logo NPUIt is certainly not the best news to report, but unfortunately the Nokia-Indian IT department tax tussle is ready to take its toll on Chennai plant employees. Nokia has announced VRS (Voluntary retirement scheme) for employees and have hinted that the tax hostility faced by it in India may be one of the reasons behind the reduction in headcount.

Nokia India recently indicated that manpower reduction would be likely at the plant due to uncertainty over continuing operations. The Income Tax Department had frozen the company’s assets last year over a tax dispute. The issue needs to be resolved soon to enable Nokia to transfer the same assets to Microsoft as part of a $7.4-billion global deal.

Nokia said it regularly reviews its manufacturing strategy to optimise and ensure the smooth and timely delivery of its products. This process considers many factors, including the predictability and stability of the regulatory environment in host countries. “Following such a review, we launched a VRS. Nokia is offering a clear financial option for interested factory employees. We feel this package offers staff the chance to seek new opportunities outside the company based on a firm financial footing,” the company said.

Though the VRS is not compulsory as per unnamed Nokia source, but trade unions are already opposing it.