Tuesday, August 5, 2025

Tata Group plans layoffs to save fixed costs as profit dips

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Tata Group plans layoffs to save fixed costs as profit dips- Report

According to The Times-News Network (TNN), as the COVID-19 crisis continues, The Tata Group may eliminate jobs at some businesses to save fixed costs as it grapples with falling profits due to the pandemic, and global economic projections pointing to a challenging time ahead.

The pandemic has impacted several businesses of Tata Group, which includes aerospace, automotive, and aviation, depressing its earnings in key markets across the world.

The Tata Group has already made moves to cut contract workers engaged in manufacturing and other functions at its various facilities, including at Tata Motors and its arm Jaguar Land Rover.

The company had a consolidated net loss of Rs 9894 crore for the January-March 2020 period, against a consolidated net profit of Rs 1108 crore in the corresponding quarter last year. It is a complete setback of the gains that the company had reported in the second and third quarters. Total revenue from the operations fell 27.7%.

Tata Motors, after sinking Rs 9,864 crore into the red in the fourth quarter of fiscal 2020, said “there are widespread opportunities to cut costs across the organization and all actions will be taken with prudence”, without getting into specifics.

Recently, Tata Group announced a 20% pay cut for the top management. This is for the first time that the chairman of Tata Sons and CEOs of all the operating companies will take a cut in compensation because of the COVID-19 pandemic.

Tata Consultancy Services (TCS), a global leader in IT services, consulting & business solutions was the first to declare pay cut for CEO Rajesh Gopinathan. His remuneration dropped by 16.5%. The remuneration of the top 15 Tata Group Companies CEO rose nearly 11% in FY19 as compared to FY18.

Tata Group has initiated a cash improvement program of Rs 6,000 crore and 5 billion pounds at its India and UK units. As sources said the company plans to axe jobs at various levels in the domestic business.

The senior leadership at the group’s several businesses, including Indian Hotels Company (which runs the Taj chain), has already taken a cut in remuneration as part of a broader restructuring plan.

The group’s real estate unit, said sources, may also retrench employees even as it battles mismanagement allegations. “With the advent of Covid-19, we are closely monitoring the situation and assessing its impact on the real estate industry and on the company,” said a Tata Realty and Infrastructure spokesperson.

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