Maruti Sends 10% Contract Workers On Leave At Gurugram Plant

Maruti Suzuki India Ltd. sent nearly 10 percent of its contract workforce at its Gurugram, Haryana plant on a leave without pay, according to a person aware of the decision, as the nation's largest carmaker's sales tumbled the most in seven years last month.

The maker of Swift hatchback and Vitara Brezza compact SUV employs nearly 2,300 contractual workers—temporary staff not on the payroll—in Gurugram, the person said on the condition of anonymity as he is not authorised to speak to the media. Of these, 250 have been asked to go on a temporary leave till the production picks up, the person said.

Besides Gurugram, Maruti Suzuki has another car plant in Haryana at Manesar. The two facilities in the northern state account for the bulk of its production.

RC Bhargava, chairman at Maruti Suzuki, said over the phone that temporary workers are being adjusted as per the production cycle. “None of the permanent employees are impacted,” he said, without commenting about the Gurugram plant.

Reuters earlier in the day reported that Maruti Suzuki has cut temporary workforce by 6 percent.

The company, however, has not yet issued any formal statement on the situation.

Maruti Suziki's sales volumes dropped about 34 percent on a yearly basis to 109,264 units in July, according to its filing. Auto demand in Asia's third-largest economy has been falling since the Diwali last year, forcing automakers to lay off contract workers and shut showrooms, BloombergQuint earlier reported. That comes as consumption slows, pulling down GDP growth to its lowest in 20 quarters in the three months ended March.

This is the first time contract workers have been asked to leave by Maruti Suzuki in nearly six years, the person quoted earlier said. The workers have been told they will be called only if the market situation improves, he said.