NEW DELHI: After India’s largest carmaker Maruti Suzuki admitted that around 3,000 temporary workers have lost jobs, now utility vehicle major Mahindra & Mahindra (M&M) has said that it has retrenched about 1,500 temporary workers since April this year. If the prolonged slowdown continues the company would be forced to lay off more employees, said M&M MD Pawan Goenka.
“From April 1 till now we have removed about 1,500 (temporary workforce)... We are trying not to remove more but if the slowdown continues we will probably be forced to remove,” Goenka said in Sri Lanka where the company has inaugurated its first local assembling unit.
Earlier this month, Goenka raised similar concern, emphasising job losses will come more from automotive suppliers and dealers and not much from original equipment manufacturers.
He further said achieving a turnaround is crucial for India’s automotive industry during the festive season, otherwise a significant negative effect may be witnessed in terms of jobs, investment, and even suppliers being forced to declare bankruptcy.
Like other industry veterans, he also sought support from the government. “The only thing that can make a difference is if the government sees it fit to support the industry for 6-8 months, then you can perhaps see a big change,” Goenka said.
Passenger vehicle sales registered negative growth in the last nine months while automobile sales in India witnessed its sharpest decline in nearly 19 years in July, dropping 18.71 per cent.
The Automotive Component Manufacturers Association (ACMA) has estimated that 1 million jobs would be lost if there is no improvement in demand, while the Federation of Automobile Dealers Association has said that two lakh people have been laid off in the last three months alone.
Recently, Maruti Suzuki chairman RC Bhargava said contracts of temporary workers were not renewed due to the slowdown.
“This is a part of the business, when demand soars, more contract workers are hired and reduced in case of low demand,” he said in a TV interview.