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Mahindra Sheds 1,500 Employees as Sales Sag
Mahindra & Mahindra Ltd. says it has eliminated 1,500 contract jobs in India since April and warns more layoffs are possible next month if sales continue to slide.
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Mahindra & Mahindra Ltd. says it has eliminated 1,500 contract jobs in India since April and warns more layoffs are possible next month if sales continue to slide.
The company also says it may defer 20% of the three-year, 180 billion-rupee ($2.5 billion) investment it announced previously. In the meantime, Mahindra is idling factories for 8-14 days during the current quarter to help trim dealer inventories.
Mahindra’s domestic sales in April-July fell 8% to 162,000 units, including a 16% decline last month. Overall demand for passenger cars in India plunged 36% to 123,000 units in July.
Mahindra isn’t alone in cutting staff. This week market leader Maruti Suzuki India Ltd. said it is not renewing contracts for about 3,000 temporary workers because of the market slump. Last month Nissan Motor Co. said it would eliminate 1,700 jobs in India as part of a global restructuring plan that will dismiss 12,500 employees worldwide.
India’s auto industry is pushing to reduce the country’s general sales tax on cars to 18% from 28% to help bolster sales. The move has been approved and is likely to be announced this week.
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