Leela Group Plans To Hand Out Pink Slips

A decline in the number of business travellers and a drop in tourist numbers has forced the Krishnan Nair-promoted Leela group of hotels to hand out pink slips.

Senior Leela group officials said, "We are planning to downsize our workforce by almost 22 per cent."

The total workforce of the group is estimated at around 2,000. Of this, the group plans to let 440 employees go.

The Leela chain has three premium hotels -- one each in Mumbai, Goa and Bangalore -- while a fourth hotel is coming up at Udaipur in Rajasthan.

The Mumbai hotel has a staff strength of about 900. The group intends to bring this number down to 700.

"We have already retrenched 85 people in the managerial and supervisory levels after September 11, and are currently in negotiations with the employees' union to work out a voluntary retirement scheme for the remaining employees," they added.

The Leela group spent Rs 45 lakh on a separation package for the 85 people. It estimates an outgo of Rs 1.50 crore on the balance 115 non-supervisory employees.

The group also plans to reduce manpower at its Goa hotel. The Goa property has a staff strength of about 600 at present. The group plans to bring this number down to 500.

Its recently opened 70-room Bangalore property has a staff strength of about 480, which according to officials is on the larger side. "The downsizing will lead to a correction in the staff-room ratio," the officials explained.

The hotel industry has been in turmoil since the September 11 attacks. The Leela chain, which depends a lot on foreign clientele, has witnessed a significant drop in both occupancy levels and hotel bookings across all its properties.

Occupancy level at the Mumbai hotel fell from 85 per cent to 40 per cent after September 11. Occupancy level at the Goa property too declined to 40 per cent from 65 per cent earlier. The Bangalore property has a occupancy level of 52 per cent.