Global Meltdown Impact: How Are Layoffs in Aviation Affecting the Indian Job Market?

Dear All,

I am sure everyone here is following news about the global meltdown, but only a few might have thought about the effect it would have on the HR aspect of business. Now, for those who didn't think about it... here's a glimpse of what's in store.

Software development majors have already issued pink slips to a good number of employees (it was expected to happen as the business economy was taking a toll). The latest in the list (as of 15th Oct '08) is Jet Air, which sacks 800 employees (claims that employees on probation are terminated). The figure is expected to reach 2000 in the near future. The same trend is expected to be followed by other aviation majors like Kingfisher.

I shall keep updating this list as I get any news in this regard. Let's keep this topic floating with updates you may have regarding the layoffs hitting the Indian job markets due to the global meltdown.

Regards,
Arun

Analysis of Act of Termination of Jet Airways

Dear friends,

Yesterday night, Jet Airways terminated more than 800 employees after joining hands with Kingfisher Airlines for operational purposes.

What are your thoughts and analysis (short-term and long-term) from an HR perspective on the termination of so many employees?

I think they should have taken a more humane approach and should not have terminated them in the first place as they were hired by the company in good times. As soon as the bad times arrived, the poor junior employees were terminated without even considering that this sudden termination will surely destroy their lives.

Just paying monetarily, i.e., the notice period amount by the company, does not take care of the mental stress and trauma suffered not only by the employee but also by the family.

The Aviation Minister and DGCA have not even bothered to comment on this, while they were quick to comment on the operational alliance as there is nothing wrong in this. They are surely not intelligent enough to understand that this is going to create a monopoly and cartel, and the common people and passengers will be the victims who will be forced to pay higher charges very soon. I hope the anti-competition authority is active enough to issue a notice and stop this alliance from taking place.

Awaiting your views and thoughts,

Namitabh

Even before Kingfisher could announce the mass retrenchment news in the aviation sector, Air India (the official carrier of INDIA) announced a mass retrenchment on nearly 15000 of its employees. Though it was presented in a different manner to the media (3-5 years unpaid holiday for 15000 employees of Air India)...the crux remains the same.

The aviation minister made his statement to clear the stand of the government “HR issues are for the companies to handle, government cannot ask the company not to sack their employees". This makes a lot of sense.

Its only when the termination is done against rules, that the employee has the right to react. If an employee has signed his employment letter which has a termination clause " Management reserves the right to terminate your services with the company without assigning any reason. During probation, your services may be terminated by giving 24 hrs notice."

In this case, how can the employee challenge the employer in the court of law?

Moreover, Does a political party have the right to interfere with the HR activities of any company? How can an individual or an institution dictate terms on HR activities to a private limited company? Is this not interference? If this is acceptable, then the day is not far when an interviewee challenges the right of the HR to interview him.

Your thoughts are welcome.

Regards,

Arun

[TURBULENT TIMES:] Jet Airways employees outside the airline office in Mumbai on Wednesday after hearing the lay-off announcement.

Mumbai: Scores of probationers of Jet Airways, including cabin crew and ground staff, staged a protest outside the airline's office here on Wednesday against the management decision to retrench nearly 1,900 staffers. About 300 retrenched employees staged the protest in suburban Andheri and sought political support. Many of the retrenched employees are in their late teens or early twenties, and several of them are willing to work for a basic salary of around Rs. 10,000 without any flight allowance.

Executive director Saroj Dutta said the airline planned to lay off 1,900 employees over the next couple of days. After 800 cabin crew members were laid off, the 1,100 employees "covering all categories" would receive termination notices. "These measures are to ensure that the airline remains economically viable in the future. The 1,900 employees have to go to ensure the jobs of the remaining 11,100 jobs at Jet."

"The aviation industry in India, a $6-billion turnover industry, is expected to lose $2 billion in 2008-09. Its economic viability has been severely affected by the record high fuel prices and most recently due to the crisis of the financial markets globally and the downturn in traffic," said Wolfgang Prock-Schauer, CEO, Jet Airways.

Jet planned for continuous growth in the domestic aviation market and implementation of the first phase of its international expansion programme. "However, the domestic market has declined by double-digit figures in recent months. Apart from this, Jet Airways' long haul expansion had to be pruned due to international developments. Also in these difficult times, the number of flights Jet will be offering in winter schedule will be about 15 percent lower than originally planned. This is inevitable in view of the declining traffic volumes," Mr. Prock-Schauer said.

What could be the reason for taking employees back on Friday by Naresh Goyal? Is it a political reason? Are the elections approaching, or is that a way to put pressure on the government to reduce tax?

It's Politics...

If the jet management doesn't listen to politicians, well, they will have sleepless nights, as confessed by Mr. Naresh Goyal (though he gave some other reason for the sleeplessness). Politics today has become a roadblock to development, be it Singur or aviation (Jet Airways). Business runs on economics, and the backbone of business is not charity. Whatever has happened in India in the near future will only make investors think twice before starting a new venture in India. Even though the cost of labor in India and China is compared to be more or less equal, issues like this make investors look for other markets. This is one of the reasons why the IIP is reducing day by day. What will happen to the Indian economy if things like this keep happening?

It's high time we Indians think about this and ACT.

Regards, Arun