Cash-strapped SpiceJet to fire 1,400 employees to reduce costs
SpiceJet has announced plans to lay off approximately 1,400 employees, which is nearly 15% of its current workforce. The decision is aimed at reducing costs and maintaining investor interest. A SpiceJet spokesperson told The Economic Times that the layoffs will ensure an alignment of companywide costs against operational requirements. At the time of writing, the shares of SpiceJet were trading nearly 4% down at Rs. 65.51 apiece.
Layoffs attributed to high salary bills
According to reports, the layoffs are linked to SpiceJet's Rs. 60 crore salary bill. Employees have begun receiving calls about being laid off. The airline has been postponing salary payments for several months, with many staff members still unpaid for January. Presently, SpiceJet employs 9,000 people and operates 30 planes, a decrease from its 2019 peak of 16,000 employees and 118 planes.
Fund infusion underway amid investor concerns
SpiceJet is working on securing a Rs. 2,200 crore fund infusion. However, some investors have developed 'cold feet.' The spokesperson denied delays in funding and mentioned that a majority of investors had subscribed to the company's convertible warrants issued in December. Spicejet is expected to announce further funding infusions in the future. Currently, the budget airline holds a market share of around 4%, with its closest competitor being Akasa Air.