IndiGo to lay off 10% of its workforce

Mumbai: IndiGo, India’s biggest carrier by market share, will lay off 10% of its workforce, its chief executive said in a note, as airline operators globally take a beating due to the Covid-19 pandemic and resultant shutdowns.

IndiGo currently has about 28,000 employees, of which 40% are pilots and cabin crew. A senior executive said pilots at the airline won’t be affected by this move yet.

“In addition to notice pay, impacted employees will be paid a severance pay which will be calculated as one month of CTC (cost to company) for every completed year of service, subject to a maximum of 12 months,” CEO Ronojoy Dutta said in the note. “At a minimum, an impacted employee will receive at least three months’ gross salary, including both the above payments.”


Medical insurance coverage for the affected staff and their parents will be extended until December.

“This is sad but inevitable,” said an independent consultant who did not want to be named.

Some Rivals Facing Acute Cash Crunch
“This is likely just the start. In fact, most other airlines have de facto laid off staff by simply not paying them for months.”

The move comes at a time when at least two rival carriers are grappling with an acute cash crunch. IndiGo, which carries half of India’s domestic passengers, is in a better position as it had cash holdings of Rs 20,377 crore at the end of March, more than the combined cash reserves of most peers.

Last month, IndiGo slashed salaries of some pilots by 45% and implemented additional furloughs, continuing measures it had started in May.

“It is impossible for our company to fly through this economic storm without making some sacrifices, in order to sustain our business operations,” Dutta said in his note.

The retrenched employees will be paid bonuses or productivity-linked incentives when IndiGo “decides to make this payout to the rest of the employees in this financial year, even after the impacted employee’s exit.” For the current year, longevity bonuses will also be paid to eligible cabin crew members.

HARSH MEASURES
Other airlines have also been taking harsh measures to stay afloat. Air India last week approved a leave without pay (LWP) scheme for its permanent employees for a period of six months to two years, extendable up to five years. The state-run carrier’s pilot union opposed it on Monday, saying it had not been consulted. As much as 90% of GoAir employees have been on leave without pay for a few months. Vistara said in June its chief executive will take a monthly 20% pay cut until December. The rest of the senior management are taking a 15% deduction and those in mid-to-junior levels a 10% cut until December, it said.