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Maruti Suzuki let go of temporary workers due to downfall in sales

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Date: 3rd August 2019

Maruti Suzuki India Ltd said in a statement that it let go of numerous temporary workers due to a downfall in auto sales. This move has added to the problem of unemployment in India.

The auto industry produces about 50 percent of India’s total manufacturing output. However, it is suffering from a slowdown the sales of vehicles, arguably one of the worst since last decade. Moreover, expectations of the revival of the industry are not strong.

Sources with knowledge of the matter told reporters that the automaker may not hire new workers until the trend turns around. 

The company has reported a reduction in the number of temporary workers for the first time. Generally, listed companies are not bound to report job cuts of temporary workers. CMIE, a private data group, said that the unemployment rate in the subcontinent was 7.51 percent last month, as compared to the 5.66 percent last year.  

India largest automaker said that there were no job cuts in the 15,892 permanent workers. But the company did not tell reporters if it was planning to cut more jobs. The automaker had reduced production by 10.3 percent, according to its statements, in the first half of the year.

As compared to July 2018, Maruti Suzuki sold only 109,265 units in July this year, which is a 33.5 percent decrease in sales.

RC Bhargava, Chairman of the company, told reporters the job cuts were because of the downfall in sales. He added they had temporary workers for this reason to start with. 

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The decline in sales has affected jobs all across the auto industry. The Automotive Component Manufacturers Association of India said that manufacturers may cut about 20 per cent of the 5 million jobs if the slowdown in the business persisted.

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