Covid-19 impact: IndiGo to lay off 10% of its workforce, says CEO

From where things stand currently, it is impossible for our company to fly through this economic storm without making some sacrifices, said CEO Dutta

IndiGo has decided to lay off 10 per cent of its workforce due to the economic crisis caused by the coronavirus pandemic, its CEO Ronojoy Dutta said on Monday.

"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 in a statement.

"Therefore, after carefully assessing and reviewing all possible scenarios, it is clear that we will need to bid a painful adieu to 10 per cent of our workforce. It is for the first time in the history of IndiGo that we have undertaken such a painful measure," he added.

As on March 31, 2019, the airline had 23,531 employees on its payroll. 

Here's the full text of the statement

Important Update from IndiGo

National, July 20, 2020

Note from Ronojoy Dutta, CEO, IndiGo

The current pandemic has impacted many industries around the world, amongst which aviation has been one of the sectors that has been impacted the hardest. Even now, IndiGo is  flying only a small percentage of its full fleet of 250 airplanes.

Right at the start of this crisis, IndiGo understood the gravity of the situation. For us, it was critical to minimise the impact of the pandemic on our employees and in fact IndiGo was one of the few airlines globally which paid full salaries for the month of March and April 2020, despite the disruption in business. Subsequently, we did have to undertake a number of measures such as Pay Cuts, Leave Without Pay and various other costs; but 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. Therefore, after carefully assessing and reviewing all possible scenarios, it is clear that we will need to bid a painful adieu to 10 per cent of our workforce. It is for the first time in the history of IndiGo that we have undertaken such a painful measure. This is indeed a very unfortunate turn of events from the optimistic growth trajectory we had carved out for ourselves just six months ago;  but this pandemic has forced us to re-evaluate our best laid plans. 

To help the impacted employees’ tide over the uncertainties emanating from this decision, IndiGo has created a ‘6E Care package’, the details of which are listed below. 

Financial support

Notice pay in lieu:  Impacted employees will be paid notice pay in lieu of serving notice applicable to them. This will be calculated on the gross salary, basis the employee’s notice period.

Severance Payment: 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. This will lead to higher cash in hand in comparison to calculations on Gross salary

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.

Annual Bonus / Performance Linked Incentive (PLI) (for Non- crew), FY 2019 – 20 : Payment of bonus / PLI shall 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.

Longevity Bonus (Crew): For year 2020, longevity bonus shall be paid along with Full and Final to eligible crew members. This bonus is only applicable for cabin crews.

Leave Encashment, if any Gratuity, as applicable per Payment of Gratuity act

Medical Insurance

Medical Insurance coverage for impacted employees will be extended until December 2020. There shall also be a provision to continue with the policy post December 2020 as per applicable market rates. For those employees who had covered their parents via the policy, such insurance will also be extended until December 2020. As is currently existing, payment will be borne by the employees.

Professional Support

We appreciate how important continuity of career is to our people and we will do our best to assist. Following are the details for Professional Support.

6E Career transition support: In addition to the financial package outlined above, we will also provide the impacted employees, an “Outplacement Allowance” to support them seek professional help to explore career opportunities, outside IndiGo.

6E Talent Directory: We value the skills and experience they bring to the table. The directory will help us reach out to them, before anybody else, when we see our operations revert to normal. Needless to say, that it is our commitment to first hire such employees back before opening such positions to other applicants.

Recommendation letter: Each employee who has been impacted will receive a personalized recommendation letter to vouch for their professional credentials

Emotional Support

We understand that these are trying times that can severely test even the best amongst us. To help the impacted employees tide over these emotional times, we will have the following Assistance Program.

1-0-1 Assistance Program - 3 months from the last date of employment with us. Details of this program will be shared with the impacted employees directly

One-way Air ticket

Should the impacted employees need to travel back to their hometown or base location, we will assist them with a one way confirmed air ticket.

This has been one of the toughest decisions that we have had to take and we are ensuring that the transition process for the impacted employees is carried out seamlessly, professionally; and with the utmost respect and compassion.  We would like to express our heartfelt gratitude and sincere thanks to all our people who have stood by us through thick and thin; and we are confident that both individually as well as collectively, we will emerge stronger out of this crisis.

To read the statement in PDF form, click here