Tata Motors, the automotive arm of India’s largest conglomerate Tata Group, plans a voluntary retirement scheme and will crunch its management hierarchy to five levels from 15 to try and reverse a decline in profit and loss of market share.
The new structure will be in place from April 1, reports financial daily Business Standard.
So far, less than 500 executives have been offered the retirement package, which includes one year’s salary and other benefits, sources said. The company did not confirm the details of the package or how many it hopes to sign up, the newspaper added.
Established in 1945, Tata Motors currently has a staff strength of 60,000 employees and a turnover of US$42 billion.
The company’s third quarter net profit plummeted 96% to Rs 1115.7 million (US$ 17.05 million) from Rs 29,526.7 million (US$ 451.10 million) in the year-ago period, reported financial daily The Hindu Business Line.
The company has lost market share in the passenger vehicle segment and faces competitive pressure in commercial vehicles, where it had enjoyed a dominant position for decades. It faces stiff competition from rivals like Mahindra & Mahindra in light commercial vehicles.
Last Friday German carmaker Volkswagen signed a memorandum of understanding to explore a partnership with Tata Motors to jointly develop auto components and vehicles for the Indian subcontinent and beyond, Reuters reported.