Battered by huge losses, the public sector telecom equipment major ITI Limited on Tuesday said it planned to close down the Rae Bareilly plant soon, having a workforce of 5,000, and also offer voluntary retirement scheme to at least 3,500 to 4,000 employees in the current financial year.

Y K Pandey, chairman and managing director of the company, told reporters in Bangalore that 11,000 employees of the total workforce of 19,000 had been identified as 'surplus' and that various options were being explored to cut staff.

ITI reported a net loss of Rs 376.75 crore (Rs 3.77 billion) on sales of Rs 1798.54 crore (Rs 17.98 billion) for the year 2002-03.

Pandey said ITI, in a bid to reduce the workforce, was thinking of various steps such as VRS, retrenchment, redeployment and lowering of retirement age.

Excess staff was the main reason for ITI's huge losses, Pandey said.

He said ITI expected 3,500 to 4,000 employees to opt for VRS in the current fiscal. A sum of Rs 150 crore (Rs 1.50 billion) would be needed to fund it, he said, adding that the government had assured to give ITI the go ahead to float bonds to raise the money.

The Rae Bareilly plant mainly manufactures C-Dot exchanges, he said, adding, one of the two plants in Bangalore would also have to be closed down.

The company has a total of seven plants. "We don't need seven plants," he added.