Mahindra & Mahindra Ltd has cut over half of its North American workforce, sources told the Reuters news agency. The COVID-19 pandemic and an ongoing legal tussle were cited as reasons.
Reuters’ sources did not reveal the number of jobs lost at the business which had over 500 employees in early 2020, according to its website.
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However, one source told the news agency “hundreds of workers” had been laid off since mid-2020 as part of a restructuring, and the cuts were as high as two-thirds of Mahindra Automotive North America’s (MANA) total staffing.
Positions cut include engineering and manufacturing jobs at the Detroit plant which produces the Roxor off road vehicle. Sales executives have also been axed.
Reuters said the cuts came as Mahindra reviewed its businesses in a drive to conserve capital and retain only those that make money or have the potential to be profitable.
MANA said in a statement cited by the news agency it had furloughed some staff and laid off others due to the pandemic and an International Trade Commission lawsuit which led to an August “cease and desist” order for the Roxor business.
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By GlobalDataReuters noted Mahindra and Fiat Chrysler Automobiles (FCA) had been in a protracted legal battle over an intellectual property infringement case which had prevented the Indian automaker from selling the Roxor in the US.
“This forced us to halt production and furlough our manufacturing team and some additional people across several functions, including the Roxor sales team,” the company said.
However, last month, the company won a favourable ruling in its lawsuit against FCA, paving the way for it to begin selling the Roxor again, the report added.
It now expects to recall a large group of employees, Mahindra said in the statement.
Reuters noted, as part of its review which began last year, Mahindra has ended its US electric scooter business GenZe, is in talks to sell its stake in Ssangyong Motor and called off a joint venture with Ford.
Mahindra shares have surged over 60% since it announced the review in June last year, valuing the company at over $12.6bn, the report said.
The automaker plans to focus on manufacturing large SUVs and electric models for its core India market where it has lost ground to competitors such as Tata Motors and Kia Motors, Reuters added.
