Indian low-cost airline SpiceJet is set to layoff between 1,000 and 1,400 staff according to reports, despite the airline recently approving a fund infusion of around Rs2,200 crore ($265m).
The struggling company confirmed the cuts as part of “an alignment of companywide costs as against operational requirements” but has not confirmed the number of jobs to be cut.
The Economic Times in India first reported the expected cuts, which could amount to up to 15% of the airline’s 9,000 employees, with the company reportedly hoping to save Rs1bn annually with the move.
According to reports, the airline had already been delaying salary payments, with some staff yet to receive their January pay, and has started making calls to affected staff about the layoffs.
Despite once being the country’s second largest airline, SpiceJet has been struggling to maintain its share of the competitive Indian aviation market. 25 of its planes were grounded after it strained to pay lessors amid strong competition from established brands such as Air India and fast-growing airlines like Akasa Air.
The airline has said that its “fund infusion”, raised through the sale of more than 300 million shares, would partly be used to fuel its growth by expanding its network and bringing grounded planes back into operation.
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By GlobalData
News of the cuts comes despite India celebrating a record year for domestic air passenger traffic, finishing with its highest ever domestic traffic in any month in December.
