Coronavirus hits pockets! Salary cut of up to 35 per cent for senior employees in this airliner

In a major development, IndiGo has confirmed that it is implementing 'deeper' pay cuts of up to 35 per cent for its senior employees in order to reduce its cash outflow amid COVID-19 pandemic. The important decision by the airliner came after a recent decision of giving layoffs to 10% of its workforce

On July, IndiGo CEO Ronojoy Dutta had confirmed, "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," Dutta said in a statement.

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

Dutta had confirmed that the impacted employees will be given notice pay, calculated on the basis of gross salary, in lieu of serving notice applicable to them. In addition to the notice pay, they will be paid a severance pay which will be calculated as one month of CTC (cost to company) for every completed year of service, subject to a maximum of 12 months, he said in the statement.

This means that if an employee has been working with IndiGo for six years, he or she will be getting an amount equivalent to six months' gross salary (CTC) as a severance payment. However, those who have worked for 12 years or more with the company will get a fixed amount equivalent to one year's gross salary (CTC) as a severance payment.

"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," he explained.

Dutta said annual bonus and performance-linked incentive will be paid to the impacted employees whenever the airline decides to make this payment to the rest of the employees during this financial year.

"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," he added. Moreover, if the impacted employees need to travel back to their hometown, IndiGo will assist them with a one-way confirmed air ticket, he said.