Indian motorcycle giant Bajaj Auto has announced big plans to reduce costs and staff numbers at KTM, the well-known Austrian bike manufacturer, as it moves closer to completing a full takeover of the company.

Speaking in an interview with CNBC TV18, Rajiv Bajaj, managing director of Bajaj Auto, said the company plans to cut expenses by more than half across several departments, including research and development, marketing, racing and administration.

“We see a clear chance to lower overheads by over 50 per cent. This will affect many areas, including motorsport and the MotoGP teams of KTM and Tech3,” Bajaj said.

He explained that KTM’s workforce had already been reduced from around 6,000 to 4,000 employees, but even that number was still considered too high. Surprisingly, about 3,000 of those workers are in office-based jobs, while only 1,000 work on the factory floor actually building the motorcycles.

Bajaj suggested that future job cuts would mostly affect white-collar employees, not the production workers, and compared the situation to what Mark Zuckerberg once said about managers managing managers, criticising the levels of bureaucracy that had developed within KTM.

Rajiv Bajaj was frank in his comments about KTM’s previous leadership, although he avoided naming individuals. He hinted, however, that former majority shareholder Stefan Pierer carried much of the responsibility for KTM’s recent financial problems.

He said the company’s decline happened surprisingly fast and blamed it largely on corporate greed.

“My first management teacher once told me that corporate greed is the biggest reason companies fail,” Bajaj said. “I’ve seen that happen at KTM over the last year.”

He explained that there were three main kinds of greed that led to KTM’s troubles:

1. Operational greed – producing far more bikes than the market could sell after the COVID-19 boom faded. This left dealers worldwide with over a year’s worth of unsold stock.
2. Strategic greed – expanding into areas that made little sense, such as electric bicycles, which stretched the company too thin.
3. Governance greed – poor decision-making at the top, with some actions taken without proper communication or approval from partners like Bajaj.

These mistakes, Bajaj said, pushed KTM towards insolvency within months.
Although Bajaj Auto had been a minority partner in KTM for many years, he admitted that while they were part of the business, they didn’t have the power to stop those risky decisions.

But despite current difficulties, Bajaj remains confident about KTM’s future. He said most of the old management responsible for the problems had already left, and a new capable leadership team was now in place.

“This wasn’t a problem created by KTM’s regular employees,” he said. “It was caused by the former top management, and most of them are no longer there.”

He added that the new management team, led by a fresh Chief Financial Officer (CFO) and Chief Human Resources Officer (CHRO), includes both experienced KTM staff and talented newcomers. Only one key role remains open, which will soon be filled.

Bajaj Auto has already provided several rounds of financial support to keep KTM running. While the Indian company now effectively controls the Austrian brand, it is still waiting for final approval from the European Commission to officially complete the takeover.

Once the process is done, Bajaj hopes to rebuild KTM into a more efficient company.