India's oldest car maker Hindustan Motors, which declared suspension of work at its Uttarpara plant on May 24, has terminated the services of around 240 managerial staff.
The company, however, retained some staff in disciplines such as finance and HR.
Hindustan Motors Ltd sources said that the termination notices on the staff were served yesterday.
The company had given employment to around 2,300 workers.
When contacted a company spokesperson said: "Managerial restructuring has been an on-going process over the last 2-3 years and continues in an effort to optimise work flow whilst retaining staff that remains critical to the continuity of operations."
The plant manufactured the iconic Ambassador cars, whose demand in the market place dwindled owing to the onset of stiff competition from Japanese and Korean players.
Commenting on the termination of the managerial staff, HR professionals were of the opinion that this action on the part of the existing top management would create a psychological impact in the minds of the workers.
"The workers will now have a feeling that since the managerial staff were retrenched, so there are little hopes of reopening," a senior HR professional said.
He further said that "as the workers were not getting their wages, so it will now be easier on the part of the management to come up with a separation scheme, and in all probability, workers will be mentally induced to accept that."
In that case, the liability of the company would get reduced to a large extent with no decrease in assets.
"It will probably be in a better situation to rope in a new investor for revival of the plant," he said.
Meanwhile, the West Bengal labour department has called a tripartite on June 12.