IndiGo airlines on Monday announced that it is laying off 10% of its workforce, the latest in a long series of layoffs in the aviation sector. This move is expected to impact over 2,500 employees of IndiGo. As of March 2019, the airline had 23,531 employees.
CEO Ronojoy Dutta said that aviation was one of the sectors that have impacted the hardest, and that they are only flying a small percentage of their full fleet of 250 planes.
Dutta said that employees who will be laid off will be paid notice pay in lieu of their notice period. This, IndiGo said, would be calculated on the basis of gross salary. Employees will also receive severance pay which will be one month of their CTC for every year they have served in the company, subject to a maximum of twelve months.
“At a minimum, an impacted employee will receive at least 3-months’ gross salary, including both the above payments. Those with higher tenure with the company will receive more as per the above calculation method,” Dutta said in a note.
He added that the payment of the annual bonus or performance linked incentive for non-crew members for FY20 will be made whenever the company makes the payment to the rest of its employees, even after the laid off employees leave the company. Any pending leaves can also be encashed.
IndiGo’s crew members who are being laid off will receive their 2020 longevity bonus when the rest of the employees receive it.
Those who have been laid off will get insurance cover till the end of the year, and the same applies to those who insured their parents under the scheme. “As is currently existing, payment will be borne by the employees,” Dutta said.
IndiGo said it was giving employees an outplacement allowance to look for professional help to get other jobs, and if and when they choose to hire more people, these impacted employees will be hired back first before opening up the position.
There is also a one on one assistance program to offer employees emotional support. If employees have to travel back to their hometown, they will be given a confirmed one-way air ticket.
In his note, Dutta said that they were one of the few airlines to pay full salaries for the months of March and April, before putting in place pay cuts, leave without pay and other cost cutting measures.
“...unfortunately, these cost savings are clearly not enough to offset the decline in revenues. And from where things stand currently, 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.