Despite being present in the market for over a decade now, JLR has relatively small operations in India. It has an assembly unit in Pune in the same vicinity as parent Tata Motor's Pimpri Chinchwad facility. As this round of retrenchment covers only white-collar and non-manufacturing jobs, workers at the factory are secure. In all, it will lead to the loss of around 20 jobs mostly in marketing, sales and administration and HR in the company.
In what can only be described as a shocking bit of development, one of the most revered automakers in the world, the Tata-owned Jaguar Land Rover has fired, at least, a third of all its staff in India. Now while we know that things in the corporate world often present baffling surprises, of which layoffs is a common component, it ought to be said, that this is no lame development.
The suddenness and scale of this development is second to none- won’t you agree?
So now the question is- what really happened and why did the Tata-owned Jaguar Land Rover executed such a bold and ghastly step, the latter in the context of those who no longer hold their jobs in one of the largest automakers around.
Reports are of the view that the layoffs at the Jaguar Land Rover were a part of the brand’s global strategy, wherein it was predecided to shed no fewer than 2,000 manufacturing jobs by the next fiscal year.
But did a similar action take place in the mega corporate a few years back in time?
It’s rather interesting to note that even back in the year 2018, Jaguar Land Rover had cut its global headcount by 1,000. And that’s not all; the following year, in 2019, the automaker did away with as many as 4,500 (3,500 more than the figure the previous year).
The group’s management, tasked with the key challenge of reinstating growth and fueling further sales, has a big job at its hand, reports confirm. As a matter of fact, the group’s cost-cutting and restructuring drive is actually called Project Charge. Furthermore, the key objective to be achieved herewith is to save the organization as figure as mighty as GBP 2.5 billion.
Now some might even wonder whether the COVID 19 pandemic that arose with zero respite for the broader world is the key driver of this firm change at Jaguar Land Rover?
To that end, it’s important to note that Jaguar Land Rover had been on a cost-reduction spree even before the pandemic struck the corporate world enforcing an atmosphere gripped by financial strife.
That said, if one were to speak specifically about the COVID-19 pandemic, then it can be said in no uncertain terms that the brand dealt with a less than glorious performance in 2020. In fact, it’s hardly believable knowing the market standing and usual sweltering performance of the carmaker that its sales fell by as much as 74 per cent in the luxury car segment.
In lines with the stringent changes currently in action at Jaguar Land Rover, here’s what a company insider had to share: “There were rumours of layoffs since the start of the year, but employees were made to believe that India, which is a very small market for JLR globally, might be spared. So, this has come as a shocker for many.”
The source would further add, ” The sackings are that way surprising even if one looks at the business environment, it is a no brainer. The top management have been left untouched though.”
The layoffs are part of JLR's global strategy to shed about 2,000 non-manufacturing jobs by next fiscal. It had also reduced its global headcount by 1,000 in 2018 and another 4,500 in 2019
KEYHIGHLIGHTS:
In its first major restructuring exercise in the county, JLR is laying off almost a third of its workforce in India, accounting for around 20 white collar jobs
It is part of the company's global strategy to trim non-manufacturing jobs by 2,000 by the next financial year
The group's ongoing cost cutting and restructuring drive called Project Charge+ aims to save GBP 2.5 billion
It has been on a staff reduction spree even before COVID-19. In 2018, it had reduced headcount by 1,000 and by another 4,500 as recently as 2019.
JLR was a laggard in the luxury car market in India in 2020 with a 74 per cent fall in sales and a 10.6 percentage point loss in market share
British marquee brands Jaguar Land Rover (JLR) that is owned by the Tata Group is undertaking its biggest ever retrenchment drive in its India operations, slashing its workforce by nearly a third, sources told Business Today.
The layoffs, which have already started and are expected to continue through this month, are part of its global strategy to shed about 2,000 non-manufacturing jobs by next fiscal. JLR had also reduced its global headcount by 1,000 in 2018 and another 4,500 in 2019. These are part of its ongoing restructuring drive Project Charge+ through which it aims to save about GBP 2.5 billion. Its prospects, as of the industry as a whole, has been further hampered by the COVID-19 pandemic.
"There were rumours of layoffs since the start of the year, but employees were made to believe that India, which is a very small market for JLR globally, might be spared. So, this has come as a shocker for many," said a company insider who requested anonymity.
Another employee said there was a false sense of complacency that because JLR's parent firm Tata Motors is an Indian entity, it would not touch its Indian employees. "The sackings are that way surprising even if one looks at the business environment, it is a no brainer. The top management have been left untouched though," he said.
"The overall number of white collar jobs in JLR is low so even with the small number of people being laid off, in percentage terms it is quite high. On the other hand, these people could have been easily absorbed by Tata Group but unfortunately that was not done."
When contacted by Business Today, JLR gave a detailed statement saying it was being done to increase efficiency in a bid to find the right cost structure for its workforce. It did not answer specific questions on the number of employees being retrenched, details of the severance package being offered to them, or whether the salaries of the top management have been slashed.
"Our future strategy, recently announced, not only includes plans for our brands and vehicles, but also how we will reimagine our entire business. As we begin our journey to becoming an agile organisation, it's imperative that we make every possible efficiency right from the start, including finding the right baseline cost for our workforce," the statement said.
"With a renewed imperative to prioritise value creation through quality and profit-over-volume approach, we are in the process of creating a flatter structure designed to empower employees to create and deliver at speed and with a clear purpose. We need to reduce the cost base to achieve a lean foundation, which will allow us to transform most effectively into a more agile organisation. The organisational design activity has already begun means that some functions within the business may increase in size and others may reduce to reflect the future vision."
JLR is considered a laggard in the Indian luxury car market, which itself has not grown by much in the last 5 years. The British brands saw their sales decline by 74 per cent in 2020 and a loss of market share of 10.62 percentage points. In comparison, the biggest in the business - Mercedes Benz - saw a 43 per cent decline, BMW by 32 per cent and Audi by 63 per cent.
"Efficiencies are required at every level to allow us to continue to invest and fund our future. This reorganisation activity, in India, also includes re-deployment and additions within our overall organization, basis skills match in different parts of our business," said the statement that was sent to Business Today as a response to its queries on Friday.
According to the 2019-20 annual report, JLR has almost 40,000 employees worldwide.
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