The homegrown auto major, Mahindra & Mahindra has fired over 300 management executives since the start of this calendar year as part of a major restructuring move.
In addition to this, the slowdown in the domestic automotive industry exacerbated, with the pandemic also not helping the situation.
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Layoffs In Mahindra
This burnt of layoffs were mostly suffered by the automotive division of Mahindra.
The slowdown has a debilitating 27.52 percent decline in sales in this fiscal so far with industry volumes shrunk by 13.2 percent.
This exit includes many senior management executives such as VS Parthasarthy and Prahlada Rao.
Here VS Parthasarthy was the President of Mahindra’s mobility services sector and a member of the group executive board.
On the other hand, Prahlada Rao was the head of business planning at Mahindra.
Including these, nearly 300 executives have been eased out by the firm since January.
Why Would This Happen?
The CHRO, Automotive and Farm Sector, M&M Ltd, Rajeshwar Tripathi said, “Transformational and future-ready work is underway within the company. We have taken up initiatives for simplifying the organization for greater agility, higher productivity and accelerated growth,”.
Further, Tripathi added, “These initiatives have been carried out in an associate-friendly manner. There have been some redundancies, but in almost all cases we offered alternate positions across the organization. In a handful of cases, we had to take the difficult decision to separate.”
What Do Employees Say?
On the other hand, a senior Mahindra executive said, “This is nothing short of a bloodbath that is unheard of in the group even in the days following the global recession of 2008,”.
“Since the start of the year, nearly 300 executives have been fired. It is brutal. The morale is really low,” he added.
He said, “Parthasarthy was an old hand at Mahindra. The way he has been shunted out is unthinkable. This is not the Mahindra of old,”.
In their defense, Mahindra said that the workers at its factories that are largely unionized have not been touched and also didn’t have any salary revision even for the top level in the management.
Apart from layoffs, a proper restructuring is underway where executives are being shunted around as a precursor to being sidelined and potentially fired.
What About The Future?
Currently, “The layoffs are only restricted to Mahindra Auto and farm division but there is a clear indication that it will spread to Mahindra Research Valley,”.
“The feeling is the first to go will be those that worked on projects with Ssangyong and Ford,” said the sources.
As informed, Mahindra is actively looking for a buyer for Ssangyong, which is a South Korean company it acquired in 2011 but failed to turn around.
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