Top company officials or their authorised public relation managers are not ready to term the move as ``retrenchment.'' However, it has caused enough panic among the employees in Pimpri and Chinchwad plants.

As many as 40 employees have so far been asked to make a choice between tendering their resignations or else getting sacked, sources close the KSB Pumps Employees' Union said. A union office-bearer, pleading anonymity, alleged that the workforce was being reduced to accommodate the expenditure on the German employees, from the company's collaborators, KSB AG.

Industrial relations manager P A Noronha, when contacted, ruled out the German workers' theory, saying, ``The company has been in the grip of a severe recession during the past few months. Added to this is the fact the company is facing fierce competition. It has, therefore, become imperative for the company to restructure its business. Out of business compulsions we had to downsize the manpower of its non-bargainable staff which was found to be surplus.''

Says Noronha: ``The company tried to accommodate some of them at other locations of the company while a few others have been asked to provide their services on consultancy basis as and when required. By way of compensation the surplus staff who were separated from the company were given one month's notice pay plus one month's basic salary for every year of completed service or part thereof in excess of six months, subject to a maximum of 15 months' basic salary.''

Interestingly, like a commando operation the entire exercise was without any warning. Said the union man, ``The employer-employee relationship here was excellent until this incident.''

On the ``surprise element'' a senior company official was frank enough. ``We did not take the employees into confidence because we feared that they would create obstacles. That would have stalled matters and worsened the situation,'' he said.

The decision to prune the manpower was based on the projection of orders for the immediate and near future, explains the official.

Well-placed company sources also brushed aside the employees' allegation that a voluntary retirement scheme (VRS) was in process and the management could have withheld its ``covert retrenchment'' exercise. As of now there were no concrete plans for a VRS, the officials stated.