SpiceJet Announces Workforce Reduction of 1400 Employees to Cut Costs and Sustain Investor Confidence

To reduce costs and maintain investor interest, SpiceJet, facing financial challenges, is set to lay off approximately 1400 employees, constituting nearly 15% of its current workforce. The Gurugram-based budget carrier officially confirmed the job cuts, stating that it aims to align overall company expenses with operational requirements.

A SpiceJet spokesperson told The Economic Times, "This is to ensure an alignment of companywide costs as against operational requirements."

Insiders familiar with the situation attributed the layoffs to SpiceJet's substantial salary bill of ₹60 crore. Employees have reportedly begun receiving notifications about the impending job cuts. The airline has been grappling with delayed salary payments for several months, with many staff members still awaiting compensation for January.

Responding to the situation, SpiceJet informed ET that it is in the process of securing a fund infusion of ₹2200 crore. While the company acknowledged progress in the funding process, it noted that some investors have shown hesitancy. The spokesperson stated, "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."

Currently, SpiceJet operates with a team of 9000 employees and maintains a fleet of 30 planes. However, in its peak year of 2019, the airline boasted a workforce of 16,000 and a fleet of 118 planes. Presently holding a market share of approximately 4%, SpiceJet faces competition from Akasa Air, its closest rival with 3500 employees and 23 planes.