Indigo to lay off 10% of its employees; says other cost-cutting measures were not enough

By: |
Updated: Jul 20, 2020 6:44 PM

In a recent move, Ronojoy Dutta, CEO, IndiGo announced that the airline will lay off 10 per cent of its workforce.

indigo, lay off, cost cuttingRonojoy Dutta said that the company had taken a number of measures such as pay cuts, leave without pay, and various other costs, but these cost savings were not enough to offset the decline in revenues.

Indigo has joined the league of companies that are laying off its employees to control the finances amid the coronavirus pandemic. In a recent move, Ronojoy Dutta, CEO, IndiGo announced that the airline will lay off 10 per cent of its workforce. Ronojoy Dutta added that the company had taken a number of measures such as pay cuts, leave without pay, and various other costs, but these cost savings were not enough to offset the decline in revenues. He further said that the move is unprecedented and painful but in order to sustain the business operations, it is impossible for the company to fly through this economic storm without making some sacrifices. 

However, to provide some support to the impacted employees, the airline company has also announced a ‘6E Care package’, which includes financial support in the form of notice pay in lieu; severance payment; annual bonus for the last fiscal; longevity bonus, leave encashment; and gratuity. It said that the impacted employees will be paid notice pay in lieu of serving notice applicable to them, which will be calculated on the gross salary, basis the employee’s notice period. Also, in addition to notice pay, impacted employees will be paid a severance pay which will be calculated as one month of CTC for every completed year of service, subject to a maximum of 12 months. 

Also Read: Cafe Coffee Day shuts down nearly 280 outlets, cites these reasons behind slowing operations

 At a minimum, an impacted employee will receive at least 3-months’ gross salary, including both the above payments and those with higher tenure with the company will receive more money. Payment of bonus or performance-linked incentive will also be made when the company decides to make this pay-out to the rest of the employees in this financial year, even after the impacted employee’s exit. The note released by the company further said that for the year 2020, longevity bonus shall be paid along with Full and Final to eligible crew members but this bonus is only applicable for cabin crews.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Coal India output improves in July with reviving power demand
2Chinese handset maker Xiaomi accused of patent infringement by US firm, case filed in Delhi high court
3Ahead of MPC meet, ICICI Bank cuts MCLR by 10 basis points