SpiceJet to lay-off more than 1,400 employees aimed at cost cutting and retaining investors
SpiceJet, the Indian aviation company, is reportedly planning to layoff more than 15% of its total workforce, according to media reports.
The airline has been experiencing financial turbulence, resulting in delayed salary payments to employees for several months, with some not receiving their January 2024 salary. This situation arose shortly after the announcement of salary hikes for its pilots during its 18th-anniversary celebration in May 2023, following the initial round of salary revisions made in November 2022.
The layoffs, which will amount to wages of up to INR 60 crore, are aimed at cost-cutting and attracting and retaining investors. Reportedly, the airline is eyeing a fund infusion of INR 2,200 crore, if everything goes well.
A company spokesperson informed the media, “The layoffs ensure an alignment of company-wide costs with operational requirements. There are no funding delays, and we are progressing well with our fund infusion. We have already made public announcements accordingly and will make additional announcements as we progress with the next tranche. The majority of investors have subscribed.”
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The airline currently operates 30 planes, eight of which are wet-leased. The employee count has decreased from 12,000 in 2019 to 9,000 in the current year, amidst legal disputes over the termination of 400 contractual employees in 2022. The financial difficulties first started to surface in 2020 when the airline announced a 30% company-wide pay cut for all employees at the top and mid-levels, without implementing layoffs.
