In a take-it or leave-it note, recently issued to the All India Voltas Employees Union, managing director ND Khurody said: "... our options are only two -- to cut costs and bring them in line with the competition of today and tomorrow, or close down and sell out. We are prepared for both."

The company plans to close some of its branch offices, reduce employee strength and prune canteen and transport costs. The other measures planned for better productivity include increase in the number of working hours and days, and reduction in paid holidays.

Justifying the cost cuts, Khurody said: "Like several old companies, we carry costs that are irrelevant and disproportionate to our business needs of today and tomorrow.These costs are so high that they not only cause losses but distort any judgement that our management, board and house of Tatas--our promoters--can make on the viability of the businesses which remain with us and which we wish to develop. In order to judge and evaluate the sustainability of our businesses, we have to benchmark our costs and work practices against competition."

According to Khurody, market conditions are forcing the company to be stringent. "Even after disinvestment in white goods and agro-chemicals, we are being hit on two fronts," he said. Shrinking markets for capital goods at lower prices are forcing the company to reduces costs.

"The current cost structure just does not permit us to price our goods and services, competitively even with higher levels of productivity," the Voltas managing director pointed out.

The employees' union has, however, accused the management of selective cost cuts. A signed handout of the employees' union states: "There is no restraint regarding the managers'perks, emoluments and privileges. The spending spree of the management does not reflect upon the company's financial crisis. Corruption has been another source of drainage for the company's resources, which has not been plugged by the management."

The union has decided to go on a token strike on April 21 to protest the management move. Union general secretary SD Jayawanth said: "We will fight for our rights. With the token strike we will launch our agitation against the management's anti-employee approach."