SpiceJet to lay off 1,400 employees to cut costs
12 Feb 2024
Budget carrier SpiceJet will cut 15 per cent jobs, reducing its workforce by around 1,400 as part of its efforts to reduce operating costs and improve investor returns.
With a fleet of 30 planes and around 9,000 employees the cash-strapped airline and a salary bill of Rs60 crore, the cash-strapped airline’s wage bill tots up to an average Rs60 crore a month.
The Gurugram-based no-frills airline had 16,000 employees and a fleet of 118 planes at its peak in 2019.
“This is to ensure an alignment of companywide costs as against operational requirements,” a SpiceJet statement quoted a spokesperson as saying.
In fact, SpiceJet has been delaying salary disbursements for several months due to paucity of funds and is yet to pay January salary tor several employees.
SpiceJet, meanwhile, has been looking to infuse fresh funds to stay afloat. However, there seems to be investor resistance to infusing funds when the airline is losing money.
Reports citing SpiceJet sources said, its board had considered and approved allotment of 5,55,00,000 equity shares of the face value of Rs10 each at an issue price of Rs50 each on preferential basis to shareholders. While a majority of them have accepted the offer, several shareholders have not come to terms with the fund raising move.
SpiceJet is reported to be looking at all options, including rationalisation of manpower, in order to align company-wide costs with operational requirements. The airline expects annual saving of nearly Rs100 crore through job cuts alone.