Airline SpiceJet has decided to fire 15% of its employees to save Rs 100 crore annually as the company has more employees available than required. Due to this news, shares of SpiceJet Limited have fallen by 4.66% to Rs 65 per share.
SpiceJet company is known for low-cost airline services in India. SpiceJet is the fourth largest airline company in India with a 6.2% market share. But at this time the company is facing financial problems, hence it wants to lay off 15% of the employees by the end of March.
According to a source, it has been revealed that after COVID-19, the number of employees in SpiceJet airline is more than the required workforce and at this time the company is also short of money. So the company wants to do cost-cutting by any means. As of March 2023, the company had 10,060 employees, of which 7,131 are permanent employees.
SpiceJet company said that workforce rationalization will help the company save Rs 100 crore annually. We will do cost-cutting with the help of layoffs and this strategy will lead to profitable growth. SpiceJet CEO Ajay Singh had said in the board meeting that this is the time to save money wisely, this opportunity for revival might not come again.
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Chairperson Ajay Singh has decided to “perform or perish”, meaning underperformers will face significant challenges at the airline. And right now he is monitoring all the major expenses of the company.
SpiceJet Airline has prepared a Rs 900 crore plan called SpiceJet 3.0. In which they will bring improvement in cost-cutting, operational front, and on-time performance. Currently, SpiceJet Airlines is struggling with a cash crunch, so maybe this plan will help the company.
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SpiceJet now has Rs 900 crore left and will raise Rs 2,250 crore in the coming time by issuing securities to 64 investors. The net loss of SpiceJet Airline has reduced to Rs 449 crore from Rs 833 crore a year ago. And Revenue from operations fell 27% to Rs 1,429 crore.
SpiceJet shares have fallen by 4.66% to Rs 65 per share, however, it is a good thing that the share has seen an increase of 88.62% in the last 12 months. Nowadays, Indigo has so much dominance in the market that apart from it, almost all the airline companies are running at a loss.
So will the SpiceJet 3.0 plan be able to make SpiceJet company profitable or not?