IndiGo has today confirmed it will be laying off approximately 10% of its workforce in the wake of the coronavirus pandemic. The airline, which was grounded for several months as India enacted a strict lockdown, employs approximately 24,000 people, meaning some 2,400 jobs could be on the line.
Thousands of jobs could go
Aviation has been one of the worst-hit industries from the COVID pandemic. Airlines all over the world have been forced to re-evaluate staffing levels, fleets and future plans, and IndiGo, it seems, is no exception.
Despite being India’s largest and most profitable airline, IndiGo too needs to trim its cloth. Today, the scale of that trim has become clear, with the airline stating that it is looking to let go of one in ten of its workers.
At the end of March last year, IndiGo’s headcount stood at just under 24,000 workers. Now, it looks as though two and a half thousand of them may not return to work. In a statement sent to Simple Flying, CEO Ronojoy Dutta said,
“Right at the start of this crisis, IndiGo understood the gravity of the situation. For us, it was critical to minimise the impact of the pandemic on our employees and in fact IndiGo was one of the few airlines globally which paid full salaries for the month of March and April 2020, despite the disruption in business.
“Subsequently, we did have to undertake a number of measures such as Pay Cuts, Leave Without Pay and various other costs; but unfortunately, these cost savings are clearly not enough to offset the decline in revenues. And from where things stand currently, it is impossible for our company to fly through this economic storm without making some sacrifices, in order to sustain our business operations.
“Therefore, after carefully assessing and reviewing all possible scenarios, it is clear that we will need to bid a painful adieu to 10 percent of our workforce. It is for the first time in the history of IndiGo that we have undertaken such a painful measure. This is indeed a very unfortunate turn of events from the optimistic growth trajectory we had carved out for ourselves just six months ago; but this pandemic has forced us to re-evaluate our best laid plans.”
IndiGo has received no bailout to help it survive the crisis. Instead, the airline had instigated pay cuts of up to 25% for its senior employees, a cut that was slated to last to the end of the 2020/21 financial year. It said it would not pay dividends in 2021 to conserve liquidity, has deferred aircraft lease payments, and has so far maintained a healthy cash position. However, this is clearly not sustainable, given the long-term impacts of COVID on travel demand.
Support packages
The employees who will be laid off are being offered something the airline calls the ‘6E Care Package’, a swathe of financial and other benefits designed to tide them over in the short term at least.
Employees will be paid in lieu of their notice period, will get a severance payment calculated based on the time they’ve been employed and will also receive either a performance-linked incentive (for non-crew) or a longevity bonus (crew). Medical insurance will be paid until December.
IndiGo maintains that it will look to rehire as many existing employees as possible once the business can support those positions. In the meantime, it will offer any laid off workers help with job-seeking as well as emotional support, and a free air ticket home if they need to relocate.
Closing his letter, Dutta thanked all the people who have stood by IndiGo and assured them that they, both as a company and as individuals, would emerge from the crisis stronger. He said,
“This has been one of the toughest decisions that we have had to take, and we are ensuring that the transition process for the impacted employees is carried out seamlessly, professionally, and with the utmost respect and compassion.”
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