SpiceJet, a private airline, plans to lay off 1,400 employees, or 15% of its workforce, as part of cost-cutting to achieve profitable expansion This move alone will save Rs 100 million annually, aircraft the company predicts. The move follows recent inflows of cash. SpiceJet is currently trying to raise funds.
SpiceJet, a private airline, plans to lay off 1,400 employees, or 15% of the total workforce. The statement said this was part of the company’s “transformational, cost-cutting strategy.”
SpiceJet, the low-cost airline, announced on Monday that it has begun implementing various steps to cut staff with the aim of saving 1 billion rupees ($12 million) annually.
According to a report by ET on Monday, the company plans to lay off these employees to save costs and maintain investor interest. As of 1:45 p.m., benchmark indices were down 0.70 percent, while shares of SpiceJet were losing around 4%.
“As part of our turnaround and cost-cutting strategy, following the recent fund infusion, SpiceJet has initiated several measures, including manpower rationalization, aimed at achieving profitable growth and positioning ourselves to capitalize on the opportunities in the Indian aviation industry,” a spokesperson for the business told ET Online.
A Spicejet representative stated, “We anticipate annual savings of up to Rs 100 crore through this initiative alone.”
At the moment, the airline employs 9,000 people and runs roughly 30 aircraft. Eight of these, along with the crew and pilots, are on wet lease from foreign carriers.
Ajay Singh, the chairman and managing director of SpiceJet, recently discussed the importance of responsible spending and said that he personally supervises significant expenses in a meeting with high-ranking personnel. As stated in an internal memo from last month, the airline wants to prioritize fleet upgrades, increase on-time performance, and take cost-cutting initiatives to streamline operations. Currently, SpiceJet is trying to raise money from different investors.
The airline said on January 26 that it has received an initial tranche of Rs 744 crore, out of the Rs 2,250 crore that will be raised through the issuing of preferential stocks. There was reportedly a lag in obtaining the required funding. Singh has promised to contribute Rs 500 crore, and the airline has also received about Rs 1,000 crore through the government’s Emergency Credit Line Guarantee Scheme (ECLGS).
