SpiceJet to lay off 1400 employees to save costs, retain investor interest

Cash-strapped SpiceJet will lay off around 1400 employees, accounting for nearly 15% of its existing workforce, with the move aimed at cutting costs and to retain investor interest.

In a statement to The Economic Times, the Gurugram-based budget carrier confirmed the job cuts.

“This is to ensure an alignment of companywide costs as against operational requirements,” the statement quoted a SpiceJet spokesperson as saying.

‘Layoffs necessary because…’

Meanwhile, people aware of the developments attributed the layoffs to SpiceJet’s salary bill of ₹60 crore.

“People have already starting getting calls (about being laid off),” a person said.

The airline has been delaying salary payment for ‘several months’; many staffers are yet to be paid for January.

On its part, SpiceJet told ET that it is in the process of getting a fund infusion of ₹2200 crore, adding, however, that some investors have developed ‘cold feet.’

“There aren’t any funding delays and we are progressing well with our fund infusion; also, we have already made our public announcements accordingly. We will be making additional announcements as we progress on the next tranche. A majority of investors have subscribed,” the spokesperson said.

Employee strength and fleet

Currently, the airline is served by 9000 people and operates 30 planes. At its peak, however, in 2019, it had 16,000 employees and 118 planes.

At present, the budget carrier has a market share of around 4%, with its nearest rival on this front being Akasa Air, which as a 3500-strong staff and 23 planes.