In a major restructuring move, domestic auto company Mahindra & Mahindra has laid off around 300 executives since the beginning of this calendar year as the slowdown in the domestic auto industry intensified and the pandemic took its toll.
Mahindra’s automotive division, which was hardest hit by the layoffs, has seen a weakening drop in sales of 27.52 percent so far this fiscal year. The industry volume has shrunk by 13.2 percent.
High-ranking sources reported on BusinessToday. The departure of many senior executives, including VS Parthasarthy, President of Mahindra’s Mobility Services Sector and a member of the Executive Committee, is among the nearly 300 executives who have been stuck with the firm since January. Other senior executives included Prahlada Rao, director of business planning at Mahindra.
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“Transformative and sustainable work is being carried out within the company. We have taken initiatives to simplify the organization for greater flexibility, higher productivity and accelerated growth,” says Rajeshwar Tripathi, CHRO, Automotive and Agriculture Sector, M&M Ltd. “These initiatives have been carried out in an employee-friendly manner. There have been some layoffs, but in almost all cases we have offered alternative positions across the company. In a few cases, we have had to make the difficult decision of parting.”
“This is nothing short of a bloodbath that is unknown to the group even in the days following the 2008 global recession,” says a Mahindra executive. “Almost 300 executives have been laid off since the beginning of the year. It’s brutal. Morale is really low.”
“Parthasarthy was an old hand in Mahindra. The way he was evicted is unthinkable. This is not the old Mahindra,” added the executive.
The company added that workers in its factories, which are largely unionized, were not affected. There was also no salary revision for the top management level.
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“There were no divisions in the worker category. There were no rationalizations or wage cuts at any level. Even in 2020, a difficult year due to the pandemic, we announced wage increases at all levels and paid full performance compensation.” Tripathi added. “As you know, the Mahindra Group has a solid talent management process. The nurturing and growth of internal talent is extremely motivating and inspiring for employees. We believe that our strategy of transferring internal talent to key positions continues to serve us well.”
However, in addition to the layoffs, proper restructuring is also under way. Executives are being pushed around as a precursor to being retired and possibly fired.
“At the moment it is only limited to the Mahindra Auto and Farming division, but there are clear signs that it will spread to the Mahindra Research Valley,” said another manager. “The feeling of being the first will be those who have worked on projects with Ssangyong and Ford.”
Mahindra is actively seeking a buyer for Ssangyong, a South Korean company that acquired it in 2011 but has not been able to turn around. An unfortunate attempt at a joint venture partnership with the US-based Ford Motor Corporation also recently failed.
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