SpiceJet, one of India’s leading low-cost carriers, has announced that it will lay off 1,400 employees, which accounts for about 15% of its workforce. This move is aimed at reducing costs and attracting investors, as the airline has been facing financial challenges amid the pandemic.
SpiceJet lay off due to salary delays and funding concerns
According to a report by The Economic Times, SpiceJet has confirmed the job cuts in a statement, saying that it is necessary to align company-wide costs with operational requirements. The airline’s salary bill, amounting to Rs 60 crore, has led to the need for staff reductions.
Employees have already started receiving termination calls, as the airline has been delaying salary payments for several months, with some employees still awaiting their January pay. The airline has also faced funding issues, as some investors have reportedly developed cold feet.
SpiceJet lay off not affecting fund infusion in progress
However, the airline spokesperson has clarified that there are no funding delays and that they are progressing well with the fund infusion. The airline is in the process of securing a fund infusion of Rs 2,200 crore, which it had announced in December last year.
The spokesperson also mentioned that additional announcements will be made by SpiceJet as they move forward with the next tranche, and that the majority of investors have already subscribed. The fund infusion is expected to help the airline improve its liquidity and operations.
Lay off impacting fleet size and market share
Currently, SpiceJet has a total of 9,000 employees and operates around 30 planes, out of which eight are leased from foreign carriers, along with their respective crew and pilots. In 2019, SpiceJet reached its peak with a fleet of 118 planes and a workforce of 16,000 employees.
Its closest competitor in terms of market share is Akasa Air, which has 3,500 employees and a fleet of 23 planes. Both airlines hold approximately 4% of the domestic market each.
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