Home >Companies >News >Mahindra sheds 'redundant' jobs at its North American subsidiary

Mahindra and Mahindra Ltd (M&M)’s North American unit, Mahindra Automotive North America (MANA), said on Wednesday that it has cut redundant jobs in an attempt to make the company leaner and optimize performance and productivity.

“The Mahindra Group will stay firm on implementing capital allocation norms, with a sharp focus on financial returns, driving growth and continued improvement in international subsidiaries. MANA has been evaluating options for making the organisation leaner and optimising performance and productivity," said a Mahindra official spokesperson.

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“Given the current circumstances, MANA has combined some of the job roles and has taken the most difficult decision to reduce the resultant redundant job roles. The Detroit centre will continue the future-ready work on new, ‘Born Electric’ platforms and is preparing for the launch of the New Roxor 2021, for which we continue to retain as well as bring in new and relevant skilled talent," the spokesperson added.

According to a Reuters report published earlier in the day, MANA has shed more than half of its workforce owing to the Covid-19 pandemic related challenges. Although the report did not specify the number of jobs cut, citing MANA website, it said the company had about 500 employees almost a year ago.

It said that the company laid off hundreds of workers across manufacturing and sales as part of an ongoing restructuring since mid-2020.

This comes as M&M continues to review its global businesses in an attempt to reduce cash burn, conserve capital and pull the plug on non-performing units that do not offer visibility of at least 18% return on equity in the near- to mid-term.

As a result over the last 3 quarters, M&M has decided to pull out of its loss making Korean subsidiary SsangYong Motor Company, shutdown US-based electric bike startup GenZe and Australia-based small aircraft manufacturer GippsAero Pty Ltd.

The operations at MANA have been under a close watch as M&M had pulled back certain large investments that were to be made in developing products for the US Postal Service.

In an interview to Mint in November last year, M&M’s Group Chief Financial Officer Anish Shah had said, “We said no to the large investments required under the US Postal Service contract because we did not feel that it would fetch the desired financial returns, and we were not convinced about the ability to execute."

The future of MANA was also marred by the ongoing legal tussle with the maker of Jeep vehicles Fiat Chrysler Automobiles or FCA, which prevented the Indian automaker to sell Roxor sport utility vehicles (SUVs) in the US market.

“The first thing we are looking at is a clear path from a legal standpoint. Once we have a clear path then we will look at the business plan and it has to be sustainable as per our benchmarks. If this works then we will invest or we won’t," Shah had clearly told Mint in November 2020.

Last month, M&M won the lawsuit against FCA wherein the US regulator allowed the former to be able to sell the Roxor SUVs in the USA.

“With the new ruling, MANA is expected to manufacture and sell the 2021 edition of the Roxor SUVs and that would drive the company to absorb additional workforce over the coming months," said a senior industry executive, requesting anonymity.

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