From melty camshafts to borderline financial deceit, the news surrounding KTM has gone from bad to abyssmal over the past couple of years. Sure, its bikes are still the things of teenage poster dreams, but plenty of people have a problem with the company, not the products. And thanks to KTM's new owner, Bajaj, folks might start looking a lot more kindly on the company.
KTM is in a hole, and as the new owners, Bajaj wants to swiftly dig the brand out of it. The plan is to cut overheads by 50% and streamline white-collar roles, all while safeguarding the staff who physically produce the units. The Indian company also plans to revamp the management team and strengthen domestic and export sales, which, combined with the massive cut in overheads, will help stabilize and restore confidence in the orange brand, or at least, that's what Bajaj hopes.
As most of you know, cutting overheads and "streamlining" any type of role means folks are losing their jobs. That's not nice, and I can tell you firsthand that, after being part of a "restructuring" myself, getting laid off sucks for everyone. But for some people, it's even worse. Blue-collar workers, often living paycheck to paycheck, are losing jobs to automation, so when there are talks about layoffs, targets are usually set to find more financially efficient machine alternatives; that's not the case with these layoffs, however.
The move from Bajaj will focus on laying off white-collar jobs, which are roles that usually come with higher salaries, sometimes arguably stupidly high. Although some blue-collar roles will be lost due to the restructuring.
“This is really low-hanging fruit. We observe an opportunity to reduce overheads by more than 50%, including R&D, marketing, operations, and general administration,” company MD Rajiv Bajaj said. “Interestingly, of the 4,000 people currently employed, only about 1,000 are blue-collar; 3,000 are white-collar, which is perplexing because the blue-collar employees make the motorcycles.”
In KTM's case, the costs of employing so many white-collar workers are disproportionately high and is indicative of the management overhead and bureaucracy problems that led KTM into such a hole. According to Bajaj, “It reminds me of Mark Zuckerberg's words about managers managing managers managing managers who manage the people who do the work.”
I'm not happy that anyone is going to lose their jobs, but at least we can take some solace in the fact that more people on the front lines will keep theirs in this particular restructuring.
