Tata Motors, the country's largest commercial vehicle maker, has reduced its managerial workforce by about 1,300 employees as a part of a restructuring exercise that will see the total number of managerial levels being reduced from 14 to five.
The number includes some employees who have been transferred to the Tata Motors group's global delivery centre (GDC) based out of Pune, some may have taken a VRS (voluntary retirement), and others who were asked to leave, post the restructuring.
"The reference on which we effectively started (the restructuring) was roughly 13,000 (managerial employees). At the end of the exercise, at this point of time, including some transferred to our shared service organisation within Tata Motors, we do see as far as the white collared population is concerned, a overall reduction in the vicinity of 10-12 per cent," Guenter Butschek, MD and CEO of Tata Motors said.
Company officials didn't share the exact breakup of how many managers were transferred to the shared services organisation (GDC) and how many were asked to leave. The employees transferred to the GDC will no longer be a part of Tata Motors standalone entity, although they will still be a part of the consolidated group.
"We underwent a detailed exercise in terms of the roles, the requirements and the fitment of the roles etc. It was a very comprehensive exercise we rolled out over 6-9 months period," C Ramakrishnan, CFO, said separately in n the restructuring.
While the company has scaled down its managerial workforce, there has been no reduction in the number of workers, officials said. With the restructuring almost complete, there is unlikely to be any further managerial reductions, officials added.
A key reason behind the reduction in managerial headcount at Tata Motors is the restructuring exercise undertaken to reduce management hierarchical levels from existing 14 to five and thus streamline the organisation.
This is expected to make the organisation more agile and enable quicker decision making to meet rapidly evolving market dynamics.
Meanwhile, Tata Motors on Tuesday reported a fourth quarter consolidated net profit of 4,336 crore, down near 17 per cent from 5,211 crore a year ago.
Consolidated revenue in the January-March quarter declined to Rs 77,272 crore, from Rs 79,549 crore in the year ago quarter.
Revenue was lower due to a translation impact from pounds to rupee, Tata Motors said, adding retail sales at its luxury Jaguar Land Rover unit remained strong last year up 13 per cent). Post Britain's decision to leave the the European Union last year, the pound has depreciated.
In the domestic business, while passenger vehicle sales were strong due to new launches like the Tiago hatchback and Hexa SUV, commercial vehicle sales, particularly in the medium and heavy truck segments, were impacted by lower freight demand and the Supreme Court verdict banning sales of vehicles with BS-III engines from April 1. The ban left lot of unsold inventory in the market, although companies also offered huge discounts to push their sales in the last couple of days of March.
The company hopes to continue stepping on the gas with new launches and investment in new products and plants in the current fiscal year. It hopes to spend around 4 billion pounds in JLR on new technologies, products and the upcoming plant in Slovakia.
