News: Maruti Suzuki trims temporary workforce by 6%

Employee Relations

Maruti Suzuki trims temporary workforce by 6%

The company reported a 33.5 percent decline in sales in July to 109,265 vehicles compared with July 2018, thus impacting the workforce negatively.
Maruti Suzuki trims temporary workforce by 6%

It is no news that the auto industry, which accounts for nearly half of India's manufacturing output, is going through one of its worst slow downs in nearly a decade. For Maruti Suzuki, the effects of this slow down have already reached its temporary workforce. 

The temporary workforce came down to 18,845, on average during the six months ended June 30, down 6%, or 1,181 people, from the same period last year. These job cuts have only accelerated since April. Although Maruti Suzuki didn’t have to disclose reductions in temporary workers, the auto-maker has still shared the report. 

First, the company had to cut production by 10.3 percent in the first six months of the year and now the percentage of temporary staff. Soon the effects of the dip in vehicle sales might impact the permanent workforce as well. At the end of March, the permanent staff stood at 15,892. 

It is not only Maruti Suzuki but companies across the auto sector are struggling. As per industry body FADA, two lakh jobs have been cut across automobile dealerships in India in the last three months as vehicle retailers take the last resort of cutting manpower to tide over the impact of the unprecedented sales slump. Till now, most of the job cuts have happened in the front-end sales jobs but if this (slowdown) continues, then even the technical jobs will be affected, mentioned the report.

The slowdown automobile companies are facing has had a ripple effect on auto part makers as well, cutting production to trim inventory amid weak demand. The vendors are being forced to follow the path of the original equipment manufacturers (OEMs) by either temporarily shutting plants or adjusting output by reducing the number of daily shifts in their factories, highlights a recent report.

An intervention from the top is the need of the hour for the auto sector. The industry’s slowdown is already creating challenges at a national level, it has already begun impacting production and employment. Considering the various reports and expert opinions, the slowdown is here to stay. In fact, the situation might soon get much worse if the government doesn’t look into the matter soon. Meanwhile, companies at individual level would also have to see how they can safeguard the interests of their employees. As there is a possibility that jobs might get affected by industry’s slowdown, they should immediately start preparing for a contingency plan. 

Topics: Employee Relations

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