In a bid to to improve operational efficiency and accountability, Tata Motors has restructured its middle-management, a move that entailed reducing its managerial workforce by around 1,500 employees.
As part of a strategy to increase the accountability of the managerial staff that reports to the top executive, the number of managerial levels has been brought down from 14 to four, a spokesperson of the company said on the sidelines of a press conference to announce the company's results on Tuesday.
The re-organisation was taken up in June last year and conducted between July and March.
We have provided for employee separation cost in the year ended March 2017. This is in line with the initiatives undertaken by Tata Motors for re-organisation and restructuring of the company's operations in terms of number of employees by reducing the managerial hierarchy.C Ramakrishnan, Chief Financial Officer, Tata Motors
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As part of the restructuring, the company shifted some employees to a global delivery centre, which is a shared services arm of the company. It also offered a voluntary retirement scheme and seperation packages to some employees. The company declined to disclose the number of employees that have been retained by the Tata Motors group in its global delivery centre.
The cost of the process was accounted for as an exceptional item in the company's standalone results for the quarter ended March. The company recognised a loss of Rs 67 crore as employee separation cost during the quarter.
India's largest automaker saw fourth quarter profit fall 17 percent to Rs 4,296 crore compared to the same quarter last year, but still managed to beat analyst estimates. Revenue fell 2.6 percent on a year-on-year basis, falling short of estimates.
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