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Whirlpool cuts jobs to improve productivity

By , agencyfaqs! | In Advertising | February 10, 2001
The US domestic appliances major has been cutting flab in India to become a leaner, meaner and more competitive organisation

agencyfaqs! News Bureau
MUMBAI

Whirlpool is cutting 400 jobs in Asia. Alongside the US domestic appliances major has been cutting flab in India at regular intervals over the past few years. The idea is to become a leaner, meaner and more competitive organisation.

When Whirlpool entered India five years ago, it inherited 8,000 employees from the bought-out facilities. Within a year, it cut about 3,000 jobs. That was followed up with the reduction of its work force by another 1,600 people who went along with the sale of its compressor unit to Tecumseh. This year it spent almost Rs 13 crore on a VRS scheme offered to about 250 people.

Whirlpool is still to decide on the area where the 400 job cuts identified for Asia is going to happen. Of its strength of around 6,300 in Asia, 3,600 are in India, 1,800 in China and the rest scattered in other parts of the continent. The assessment has just started and the final picture would emerge in the next quarter.

The entire process of job cuts is driven by the current need of the organisation to cut costs and improve productivity. The company focusses on improving productivity by about five to 10 per cent every year and plans to do so for the next few years. Whirlpool of India chairman Garrick D'Silva told newsmen that job cuts are just a part of a larger exercise for improving productivity, and not forced upon the company because of competition.

The results are for all to see. Whirlpool of India, once seen as a burden on its parent, has posted a net profit of Rs 20 crore this year. The improved performance has made Whirlpool products less dependant on the vagaries of economic cycles.

Apart from cutting flab, the company is also focussing on other areas like business processes reengineering; total cost productivity through application of Six Sigma, which drives out wastes and improves quality; people productivity enhancement; purchasing raw materials through global sourcing, which brings down costs substantially; effective management of vendor base; remodelling of supply chain, shrinking vendor base to give just in time delivery and better quality (vendor base shrunk from 400 to 120 at per cent).

© 2001 agencyfaqs!