In a bid to address a severe cash crunch and attract potential investors, SpiceJet, the budget airline, has reportedly announced the layoff of 1,400 employees, which constitutes approximately 15% of its current workforce. The move comes amidst the airline industry’s ongoing challenges and the need for SpiceJet to align its costs with operational necessities.
With a current staff of 9,000 employees and a fleet of around 30 planes, including eight wet-leased from foreign carriers along with crew and pilots, SpiceJet aims to streamline its companywide costs against operational requirements. The airline is facing a ₹60 crore salary bill, contributing to the financial strain, and has reportedly been delaying salary payments for several months, with some employees still awaiting their January pay.
The decision to cut jobs is seen as a strategic move to maintain financial stability and generate investor interest. SpiceJet is reportedly seeking a fund infusion of ₹2,200 crore to address its financial challenges. While the funding plans are said to be on track, the airline has not provided specific details on the timeline for the announcement.
At its peak in 2019, SpiceJet operated with a fleet of 118 planes and a workforce of 16,000 employees. The current downsizing aligns the airline with industry trends and aims to create a more sustainable operational model. As of now, SpiceJet’s nearest rival in terms of market share is Akasa Air, which operates with 3,500 employees and a fleet of 23 planes.
SpiceJet’s stock witnessed a 3% decline, trading at Rs 68.18.
