SpiceJet is preparing to cut costs and boost investor confidence by cutting jobs. The company, which currently employs 9,000 people and operates approximately 30 aircraft, plans to lay off 1,400 employees, or approximately 15% of its workforce.
The airline, which is facing a major financial crisis, has eight aircraft on wet lease from foreign airlines, each with its own crew and pilots.
According to a report in the Economic Times, a spokesperson stressed that the move is aimed at aligning company-wide expenses with business needs. Insiders familiar with the situation said the airline's 60 billion rupee salary bill necessitated the job cuts.
The airline has delayed payroll payments for several months, and many employees are still waiting for their January paychecks, according to people cited in the report. One of them said individuals were starting to receive layoff calls.
Last year, the low-cost carrier announced it would raise over Rs 2,250 crore by issuing shares to a wide range of investors, including financial institutions and FIIs.
The company has battled a number of challenges, including difficulties with aircraft lessors. SpiceJet also faced a legal dispute in September last year with Credit Suisse and its former owner Kalanithi Maran over unpaid dues.
As of 10:50 am, the airline's stock was trading at a price level of Rs 65, down almost 4 per cent on the BSE.