Cash-strapped SpiceJet to sack 1,400 employees; Here's why

Indian budget carrier SpiceJet has announced its plan to lay off 1,400 employees, effectively eliminating 15 per cent of its workforce in an effort to cut costs and retain investor interest. “This is to ensure an alignment of companywide costs as against operational requirements,” a company spokesperson told The Economic Times. Currently, the Gurgaon-based airline has 9,000 employees and operates about 30 planes. Out of these eight are wet-leased from international carriers including crew and pilots. Why is SpiceJet laying off employees? People familiar with the matter have said that the job cuts are “necessary” owing to the airline’s Rs 60 crore salary bills. One person said that the company has already started to make calls to employees who have been decided to let go. SpiceJet has been delaying the payment of salaries in the past couple of months with many not receiving their salaries in January. “There aren’t any funding delays and we are progressing well with our fund infusion and have already made our public announcements accordingly,” the spokesperson said. “We will be making additional announcements as we progress on the next tranche. The majority number of investors have subscribed.” More trouble for SpiceJet The announcement of lay-offs comes at a time when the Delhi High Court ordered the airline to settle outstanding dues worth $4 million it owes to two engine lessors by 15 February. The airline saw its peak in 2019 when it boasted a fleet of 118 planes and 16,000 employees. However, in the current scenario, SpiceJet faces considerable competition from other budget carriers, especially Akasa Air.