Indian automaker Mahindra & Mahindra Ltd has cut over half of the workforce at its North American unit, two sources knowledgeable with the matter informed Reuters, because of the coronavirus crisis and an ongoing legal tussle.
The sources did not provide a figure for the number of jobs lost at the business, which had more than 500 workers in early 2020, according to its website.
However, one of the sources said “hundreds of workers” had been laid off since mid-2020 as part of a restructuring, and that the reductions were as high as two-thirds of Mahindra Automotive North America’s (MANA) total staffing.
Positions include engineers and manufacturing jobs at its plant in Detroit that produces the off-road vehicle Roxor, and also sales executives.
The cuts come as Mahindra evaluates its businesses in a drive to conserve capital and retain only those that make money or have the possibility to be profitable.
MANA said it had furloughed some staff and laid off others because of the coronavirus crisis and an International Trade Commission lawsuit which led to an August “cease and desist” order for the Roxor business. It did not give figures.
Mahindra and Fiat Chrysler Automobiles (FCA) have been in a legal battle over an intellectual property infringement case that has prevented the Indian automaker from selling its Roxor vehicle in the United States.
“This forced us to halt production and furlough our manufacturing team and some additional people across several functions, including the Roxor sales team,” the automaker said.
However, last month, the Mahindra won a favourable ruling in its lawsuit against FCA, allowing it to start selling the Roxor again.
It now expects to recall a large group of workers, it said in the statement.
Mahindra’s shares have increased more than 60% since it announced the review in June last year, valuing the company at more than $12.6 billion.
The automaker plans to focus on manufacturing large sport-utility vehicles and electric models for its major India auto market, where it rivals major automakers such as Tata Motors and Kia Motors.