Suffering from a weak demand, auto major Mahindra & Mahindra (M&M) has cut 1,500 temporary workers this fiscal. The action of Mahindra and Mahindra was close on the heels of auto major Maruti that decided to cut 3000 temporary jobs a couple of days back. Informing the decision, Pawan Goenka, managing director, M&M, told reporters that the company has retrenched about 1,500 temporary workers since April 1 this year. “If the slowdown continues the company will be forced to lay off more employees,” he added. Major Auto companies have already sought a fiscal stimulus package from the government for the sector, which had been reeling under the pressure of an unprecedented slowdown.
M&M has deferred about 15-20% of its capex from its overall investment plan. Goenka was speaking on the sidelines of the opening of M&M’s first completely knocked down automotive assembly unit in collaboration with Ideal Motors of Sri Lanka. According to Goenka, a turnaround is crucial for India’s automotive industry during the ongoing festive season, or else a significant negative effect may be witnessed in terms of jobs, investment, and even suppliers being forced to declare bankruptcies.