Private airline IndiGo on Monday said it will lay off 10% of its workforce in an attempt to cut costs amid poor revenues due to the coronavirus pandemic. InterGlobe Aviation Chief Executive Officer Ronojoy Dutta made the announcement in a letter to employees. InterGlobe Aviation Limited is the parent company of the private airline.
The nationwide lockdown imposed in March to combat the Covid-19 coronavirus led to the suspension of all flight operations. Some domestic air services were allowed to resume on May 25. With reference to this, Dutta told the employees that though the response to the restart of operations has been “somewhat encouraging”, IndiGo is still flying only a small percentage of its fleet of 250 aircraft.
Dutta attributed this to a “toxic mixture of customer uncertainty, a weak economy and travel restrictions”. He said that in the best case scenario, IndiGo will be able to operate only 70% of its aircraft by the end of the year. “The long term stability of our company requires us to take some near term cost reduction measures,” the CEO said. He said measures such as pay cuts and leave without pay had not been sufficient to offset the loss of revenue.
“We are therefore, for the first time in our history, taking the very painful step of initiating a layoff program, impacting approximately ten percent of our workforce,” Dutta said. He said IndiGo’s human resources department will soon reach out to those who will be retrenched.
The company CEO also announced a “generous separation package” for the employees who will be laid off. However, the terms of this package are not clear yet.
As of March 31, 2019, the airline had 23,531 employees on its payroll, Bloomberg reported. This means thousands of employees will lose their jobs.
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