IndiGo lays off over 2300 employees, announces 6E care package for those impacted

The fresh announcement also comes days after national carrier Air India approved a leave without pay (LWP) scheme for employees ranging from six months to two years.
For representational purposes. (Photo | PTI)
For representational purposes. (Photo | PTI)

NEW DELHI: IndiGo, India's largest and only cash-rich airline, is reducing its workforce by 10 per cent to offset the impact of COVID-19 on its revenue. With this, IndiGo becomes the first major carrier in the country to formally announce layoffs even as others have been reducing their headcount silently since late March. 

The fresh announcement also comes days after national carrier Air India approved a leave without pay (LWP) scheme for employees ranging from six months to two years and extendable up to five years.

"It is clear that we will need to bid a painful adieu to 10 per cent 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 CEO Ronojoy Dutta said in a statement on Monday.

A senior employee at IndiGo told The New Indian Express that the airline had already started rationalising its cabin crew and ground staff workforce since last few weeks. "Right now it is too early to say who all have been impacted. It won't be a surprise if many pilots and managerial-level workers are included in the 10 per cent bracket," he said. 

IndiGo has a little less than 24,000 employees and the new move is set to impact over 2300 workers. The carrier has already implemented salary cut across verticals to bring down its fixed cost.

"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,” Dutta said. 

IndiGo also announced creating a "6E care package" for the impacted employees. They will receive at least three months’ gross salary and other benefits such as gratuity, leave encashment and longevity bonus (for cabin crew) among other things. Medical Insurance coverage for impacted employees will be extended until December 2020. 

“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,” Dutta's note added.

On the existing condition of the industry, Dutta said aviation has been one of the sectors that has been impacted the hardest and even now, IndiGo is flying only a small percentage of its full fleet of 250 airplanes. 

India had resumed domestic operations at limited capacity in May, but owing to very fast spread of coronavirus, passengers are unwilling to board planes. Industry regulator DGCA data showed that traffic had plummeted by 83.5 percent year on year in June.

Homegrown carriers are struggling to remain operational as the government so far has denied direct relief to the sector. Experts feel it will take many years for airlines to fly back at 2019 level. Losses for airlines is expected to swell as well. Ratings agency Crisil says Indian airlines are staring at a massive Rs 1.1-1.3 lakh crore revenue forgone over fiscals 2020 to 2022 due to pandemic. 

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The New Indian Express
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