Bajaj Auto rules out job cuts amid slower demand

Bajaj Auto, the country's second largest two-wheeler maker, today said there was no case for any layoff in the company even though there has been a cut in production due to slowdown in demand.

"Unlike the IT or services industries, where the total cost of employee is 16-18 per cent, in our case it is 3.5 per cent... So if I sack or reduce employee numbers it will not help me much. So why should I get bad reputation?" Bajaj Auto Chairman Rahul Bajaj told reporters on the sidelines of the World Economic Forum's India edition.

He said there has been a slowdown in demand which has resulted in production cut.

"October was a disaster (in terms of sales). November will be equally bad," Bajaj noted.

According to the figures released by the Society of Indian Automobile Manufacturers (SIAM), motorcycle sales in the country during October was down by 18.17 per cent at 5,38,353 units, against 6,57,874 units in the same month a year ago.

Total two-wheeler sales in the month also dipped by 14.52 per cent at 6,78,245 units, as compared with 7,93,420 units in the same period last year.

Asked if that would mean further production cuts, he said: "If demand goes down, production will go down. If the demand goes up, production will go up."

Bajaj said he did not see demand going up in the near future, adding, "I see that for the next 12 months, we have to tighten our belt."