Once bitten, twice shy!

Invariable issuance of pink slips has been a norm amongst companies over the last one year – well, to beat the downturn blues. But, not all have been successful in implementing the same. Naresh Goyal’s Jet Airways, in October last year, was forced to take back 1,900 employees after it faced wrath and protests across the country. But, this private airline has once again unveiled its plans to cut down the extra flab in its workforce (by 2,000 employees) to save cost and stem its bleeding bottomline. But, then the real question arises too – Will it succeed in terminating the jobs this time or will it be forced to eat the humble pie once again? Certainly, with an aircraft to employee ratio of 1:145, the total manpower of Jet Airways currently stands at 12,000 and as such it’s planning to bring it to 10,000. “Streamlining the number of employees and capacity cut is imperative for Jet Airways to stem its current losses,” agrees Hatim Broachwala, aviation analyst, Khandwala Securities. However, learnt his lesson from the last fiasco, Goyal is strategically implementing the job cuts in various phases this time. Jet Airways, which pocketed a heartrending Rs.225 crore loss in Q1 FY 2009-10, is certainly cautious enough this time to not to go for a mass retrenchment. More importantly the airline is rightsizing the number of personnel in various verticals this time rather than churning out people from just one department. In fact, the process of issuing pink slips has already started in the company as 50 employees were off loaded last week. So, with this slow and steady approach (and without much noise), it seems that Jet might succeed in its endeavour without much fuss this time.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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