Tata Motors cuts up to 1,500 managerial jobs amidst profit fall

Tata Motors, which continues to bleed with a 17 per cent fall in fiscal fourth quarter net profit, on Tuesday said it has reduced its managerial workforce by up to 1,500 people in its domestic unit as part of an organisational restructuring exercise.

"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 per cent (up to 1,500)," managing director and chief executive Guenter Butschek told reporters.

He was speaking after announcing the company's earnings for the fiscal 2016-17.

Tata  Motors had last year undertaken a review of the managerial structure with the aim of reducing the number of managerial levels to 5 from the 14. The company, however, said the job cuts have not impacted blue collar or shop floor worker jobs.

"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," group chief financial officer C Ramakrishnan said.

It is a "holistic fundamental review" aimed at bringing ownership and accountability to the various managerial levels, he said, adding that the review programme has been successfully completed and that the company will be coming out with a new structure soon.

The aim was streamlining the managerial structure and was not intended to reduce jobs, officials pointed out.

While some of the employees were given the option of voluntary retirement, some were transferred to a services arm, Global Delivery Centre, the officials said.

Several organisations across various industry sectors are going in for job cuts, either to cut flab or as part of automation, as they try to drive profitability.

The job cuts, however, have led to concerns that the government's economic policies are leading the county towards 'jobless economic growth' across multiple sectors, including capital goods, banking & finance, and information technology.

Engineering, procurement and construction major Larsen and Toubro had announced shedding of 14,000 jobs in the first half of FY17, HDFC Bank has also reduced its workforce by over 10,000 in the second half of FY17 alone.

In the IT segment, the country's largest private sector employer, some estimates have pegged the job losses at over 50,000.