After reports of a slew of job cuts in 2017 in various sectors such as IT and media, it looks like Tata Motors has joined the fray. The firm is set to restructure its workforce – the biggest exercise in the company's history – in a bid to save about Rs 400 crore.
About 1,200-1,300 employees have been reassigned, shifted to other departments and even let go as part of the restructuring exercise. Apart from this, the company has also reportedly done away with about 2,500 designations and positions.
Gajendra Chandel, head of human resources at Tata Motors, explained that without the exercise employee costs would have hit the roof. "It would be more if we look at the direct and indirect benefits — nothing less than Rs 300-400 crore. When we did the budgeting for this year vis-a-vis the new structure, there is a gap of Rs 400 crore," Chandel told the Economic Times.
While about 8-10 percent of managerial-level jobs have been cut until now, Tata Motors is also planning to cut about 3,000 blue-collar jobs in the next two-three years.
"We are working on productivity through skill development," Chandel told the daily. "Mostly 2,000 of the flexi workforce has been reduced and is expected to reduce further. We are trying to minimise the fluctuations to rationalise the workforce. We have about 30,000 blue-collar workers, so there will be a 10% reduction across all plants put together."
While the "organisational restructuring" is showing an impact now, the process, in fact, started in 2015, when Tata Motors got Accenture on board to plan its future in terms of cutting costs and combating the cut-throat competition in the auto industry. It then also hired Ernst & Young to evaluate various jobs and positions in the firm.
Meanwhile, Tata Motors is not the only auto brand to cut jobs and restructure the workforce. American multinational automaker Ford is also likely to cut about 10 percent of its salaried workforce worldwide. The decision comes at a time when the brand aims to boost its profits and stock price.
Though the company did not confirm the layoff, Ford did say it intended to concentrate on cost optimisation and higher efficiency.
"We remain focused on the three strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities," Reuters quoted the Dearborn company as saying.
"Reducing costs and becoming as lean and efficient as possible also remain part of that work. We have not announced any new people efficiency actions, nor do we comment on speculation."
