Blog: Jet, HSBC to hand out pink slips

Strategic HR

Jet, HSBC to hand out pink slips

Many companies are in a restructuring mode as business models are under pressure to adapt to continuous changes
Jet, HSBC to hand out pink slips

If April was the season of hiring, then June seems to be season for restructuring and by default retrenching. At least two major airlines, one mobile device maker are laying off people, while others are mulling how many staff will be handed out pink slips.

Nearer home, domestic airlines Jet Airways handed over pink slips to 50 expat pilots in a bid to cut costs. “We have prematurely terminated the service contracts of 50 expatriate pilots between April 1, 2014 and March 31, 2015,” Jet Airways acting Chief Financial Officer (CFO) Ravichandran Narayan said during a post-earnings analysts call.

The Naresh-Goyal promoted airline now has a total of 1,120 pilots, with the number of expat pilots at 88 after the retrenching. Jet Airways is trying to reduce its dependency on high-cost overseas flight crew. Also, the DGCA has asked airlines to phase out expat pilots by December 2016. In August 2013, Jet had appointed US consultant firm Seabury to prepare a market study on route network and fleet, to help the airline craft a strategic plan and expand operations. In its report, Seabury said Jet Airways can achieve cost savings of $9 million just by shifting to local pilots from expats as an expat pilot flying Boeing 777 aircraft takes a salary of $18,000 per month, while a local pilot takes $13,000.

Beleaguered airline Malaysia Airlines is in the news again—this time for sending out 20,000 termination notices!! The airline, in a desperate bid to reinvent itself, has said that it will rehire 14,000 of the staff back after the restructuring and rebranding is complete. The airline has been in a spot of bother ever since its airline MH370 disappeared over the Indian Ocean along with its passengers on March 8, 2014. Neither the plane, nor the passengers or crew have been recovered till date. The search for the plane is still ongoing. Another major disaster struck the airline in July 2014 when another Malaysia Airlines plane was shot down over Ukraine. These major disasters spooked the public and left Malaysia Airlines gasping for life.

When Cisco’s outgoing CEO John Chambers retired and Chuck Robbins took over the job, it didn’t cut ice with two top executives who were close to Chambers. The departure of COO Gary Moore and President Rob Lloyd, who were frontrunners for the job, was not really a shock for many. But, what caught everyone’s attention was what the new CEO wrote in his blog: “As I transition to the role of CEO, my focus areas are acceleration, simplification, operational rigor and culture.... Going forward, we will move to a flatter leadership team designed for the speed, innovation and execution that is required of us over the next decade.”

The CEO has kept everyone on the tenterhooks by mentioning a flatter leadership team. Cisco traditionally announces any large layoffs along with its annual financial results scheduled for August. Since 2011, the company has been announcing a series of layoffs eliminating about 18,000 jobs. It employs about 70,000 people worldwide.  

Another company that is mulling to layoff people is BlackBerry. The Canada-based company said it wanted to consolidate its device software, hardware and applications business. It has not disclosed how many employees will be impacted by this move. The company has more than 6,000 employees as of February this year. BlackBerry has been in a restructuring mode for the past two to three years.

HSBC is rumoured to be laying off more than 20,000 people. According to Sky News, next week Stuart Gulliver will announce plans for redundancies in the range of 10,000-20,000, or the removal of up to 8 per cent of the bank’s total workforce by 2017.

Whether it is business imperatives or cutting costs, a lot more companies are now restructuring. Of course, while it makes perfect business sense, does it make sense to the employees who are laid off? Is it right for the employees not to expect to be laid off in these uncertain times when even the businesses themselves are caught off-guard? Write in your comments below and hopefully there will be a Part II to this blog!

Read full story

Topics: Strategic HR, #Jobs, #Current

Did you find this story helpful?



How do you envision AI transforming your work?