SpiceJet Announces Significant Workforce Reduction to Enhance Profitability and Growth

SpiceJet, a prominent low-cost carrier based in Delhi International, is set to reduce its workforce by approximately 1,400 positions, equating to nearly 15% of its total employees, as reported by The Economic Times. This strategic move aims to reduce the airline’s annual payroll expenses by about INR100 million (USD12 million) and is a part of SpiceJet’s comprehensive turnaround and cost-optimization efforts following a recent injection of funds.

In a statement, a SpiceJet spokesperson highlighted, “As part of our turnaround and cost-cutting strategy, following the recent fund infusion, SpiceJet has initiated several measures, including manpower rationalisation aimed at achieving profitable growth and positioning ourselves to capitalise on the opportunities in the Indian aviation industry.” Currently, SpiceJet employs around 9,000 individuals.

There have also been unverified claims suggesting that SpiceJet is postponing some of its salary payments, with a portion of January’s payroll still pending. The airline has started the process of notifying affected employees about the impending terminations.

This workforce reduction initiative coincides with SpiceJet’s ongoing efforts to raise INR22.5 billion rupees (USD271.1 million) in capital. This fundraising is intended to help the airline reduce its liabilities, fund expansion, and strengthen its balance sheet. The capital raising initiative has received approval from SpiceJet’s shareholders, board, and the Bombay bourse.

Despite initial concerns over potential funding delays, particularly from Mumbai-based businessman Harihara Mahapa and his wife Preeti Mahapatra—who had pledged to contribute a significant portion of the total capital—the airline has refuted such claims. “There aren’t any funding delays and we are progressing well with our fund infusion and have already made our public announcements accordingly,” the spokesperson assured, indicating further updates on the capital raising progress will be forthcoming.

SpiceJet’s decision to cut jobs comes against the backdrop of the airline reporting losses totaling almost INR55 billion (USD662.8 million) over the past five years, alongside a gradual loss in market share due to capacity and reliability challenges. The airline is also engaged in ongoing negotiations to resolve legal disputes with lessors, creditors, and other stakeholders.

The airline operates flights to 46 destinations across five countries with a fleet of 64 aircraft. However, 28 of these aircraft are currently inactive for various reasons, underscoring the operational challenges faced by the carrier.

SpiceJet’s strategic adjustments, including the workforce reduction, are critical steps towards stabilizing its operations and ensuring long-term sustainability and growth within the competitive Indian aviation industry.