India's largest maker of middle-weight motorcycles, Royal Enfield has laid off close to 100 employees as part of its annual performance review. According to industry sources, the company has been reducing staff across operations for optimising costs.
In response to a query from CNBC-TV18, Royal Enfield said, "Around 90-100 employees are being disengaged from the company as part of the normal annual performance evaluation process. This is part of the usual annual employee evaluation done every year. The company is extending all possible support to these employees."
CNBC-TV18 has learnt from sources that the employees are being disengaged as part of a review that began in April. According to Royal Enfield's annual report, the company employs 5,000 permanent employees.
However, a company source told CNBC-TV18 that the retrenchments are less than 1 percent of the 10,000 strong overall workforce of the company. Sources said the company has disengaged employees across functions and positions ranging from executives to senior managers.
Royal Enfield had reported a 12 percent drop in sales volumes in FY21. The company reported a profit of Rs 237 crore for Q1 of FY22 against a net loss of Rs 55 crore in Q1 of FY21. For the last few quarters, Royal Enfield has been re-looking costs and working at cost optimization across levels.
Analysts say, due to the slowdown in the auto sector and decline in sales volumes, several automobile companies have resorted to workforce restructuring. Continuing pressure of high commodity costs has been impacting the cost of manufacturing and as a result, companies are constantly working on reducing costs across company functions.
(Edited by : Jomy Jos Pullokaran)
First Published: IST