News: Tata Motors cuts 1500 managerial workforce

Talent Management

Tata Motors cuts 1500 managerial workforce

The reduction is part of the restructuring exercise the company has undertaken.
Tata Motors cuts 1500 managerial workforce

Tata Motors has said that it has reduced its managerial workforce by up to 1500 people domestically as part of an organizational restructuring exercise. This has come right after the company decided to trim its workforce by Voluntary Retirement Schemes (VRS) in March this year. 

This comes as part of the company plan to decrease its management levels from fourteen to five – a process which is in effect from April 2017.

Guenter Butschek, the MD and CEO said post announcing the company’s earnings for the fiscal 216-17, “The reference (total managers) on which we started (the exercise) was in the vicinity of 13,000...we do see as far as the white-collar population is concerned, an overall reduction in the vicinity of 10-12% (up to 1,500).”

The Tata Motors management, however, said blue collar or worker jobs have not been impacted as part of the exercise. With the aim to reduce the number of managerial levels to 5 from the earlier 14, the top automaker undertook a review during the last financial year and identified the possibilities for restructuring.

“We underwent a very detailed exercise in terms of the roles, the requirements and the fitment of the roles etc. It was a very comprehensive exercise which we rolled out over a 6-9 month period which also factored in performance and leadership qualities,” the company’s Group Chief Financial Officer, C Ramakrishnan said to a News agency.

In 2015, the company had come up with a VRS scheme for employees engaged in operations at all plants in India, in order to build a younger and more efficient workforce, which was expected to help the company save on employee costs in the long run. 

The company joins a growing number of organizations adopting such strategies for a variety of reasons, ranging from cutting the flab to automation.

These job cuts, which have led to concerns on ‘jobless economic growth’ in various quarters, have been across multiple sectors, including capital goods, banking & finance, and information technology. In the IT segment, the country’s largest private sector employer, some estimates have pegged the job losses at over 50,000.

Terming it as a “holistic fundamental review”, he said the program has been completed now and the company will be coming out with a new structure soon. Officials said the exercise was carried out with a view to get ownership and accountability within the organisation and not to cut costs. While some of the affected employees were given voluntary retirement option, some were transferred to a services arm — Global Delivery Centre, the officials said. However, they did not quantify the number of people moved to the services arm which is based out of Pune. 

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