Which industry will be next? In giving pink slips to its employees.
That seems to be the question uppermost in the minds of young employed Indians after Jet Airways, in a span of two dramatic days for its staff and the nation, fired and hired 1,900 of its probationary employees.
Incidentally, just two months back these employees were assured by the management that their jobs were safe according to some newspaper reports.
But before we try to guess which industry might begin layoffs next let us first understand what went wrong with the aviation industry, to which Jet Airways belongs, and then try to figure out why other sectors like real estate, banking, hospitality, metals, IT and power could follow.
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So what changed so drastically that Jet Airways had to sack 1,900 of its employees one fine day?
For one, the aviation industry had started bleeding ever since crude prices crossed $ 80 per barrel leading to a rise in aviation turbine fuel, fuel on which aircrafts run. In their race to grab market share due to growing competition in the aviation sector airlines were under pressure to keep their fares low. This started bleeding them and at last count Jet Airways was making a loss of Rs 8 crore a day. That is Rs 2,920 crore in a year!
With such huge losses facing Jet Airways the only way out was to cut costs. And it all began after Jet Airways and Kingfisher Airlines came together to share their common infrastructure and save on costs. As an extension, Jet Airways' management decided to save more money by sacking employees.
Fortunately enough, Jet Airways' chairman has decided to reinstate all the 1,900 employees. The economic conditions that led Jet Airways to sack employees, however, still remain, and so do other factors that could compel the sectors mentioned above to possibly cut back on their employee strength.
Text: Prasanna D Zore | Photograph: INDRANIL MUKHERJEE/AFP/Getty Images
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