Forward by Venkat
India’s largest private airline, Jet Airways, is planning to slash salaries of its top 200 officials by 25-30% in order to battle rising costs. Also, it has not yet decided whether to pay Diwali bonus for this year.
A top Jet Airways official said the proposed salary cuts would affect employees who are earning Rs 10 lakh and above per month. The salary cut may come into effect from next month, the official said, asking not to be quoted. He added that an announcement to this effect is likely on Saturday.
The senior employees likely to be hit include pilots and aircraft maintenance engineers, apart from management and planning officials. The official could not provide the quantum of savings the airline might achieve from the exercise. He said salary costs account for about 12% of Jet’s total operating costs while fuel costs are the highest at 33%.
When contacted, Jet Airways executive director Saroj Datta said: “We will do everything to reduce costs of the company. If necessary, this would also include salary cuts for the top management.”
However, the company has not yet made any decision on this, he added. Jet Airways’ tier I employees enjoy take-home salaries as high Rs 10-15 lakh per month, depending on their experience and positions.
Of its 13,200 employees, around 2,000 earn more than a lakh per month. These employees are mainly pilots and aircraft maintenance engineers.
Jet is also planning to rejig the salary structure of its reinstated cabin crew and other staff by shifting a major portion of their salary to the variable component. Also, the cabin crew is expected to accept a substantial reduction in their flying hours as Jet will reduce flight capacity by 30%.
Jet had reinstated 1,900 employees last week, within two days of laying them off. In 2007-08, Jet Airways’ salary bill had shot up to Rs 1,205 crore from Rs 938 crore in 2006-07.
This was mainly due to the recruitment of pilots, engineers and cabin crew required for the company’s expansion plans. This included a significant number of expatriate personnel.
An analyst told ET that Jet Airways will report a quarterly loss of more than $120 million (Rs 589 crore) for the three months ended September 2008. It had made a profit of Rs 143 crore in June quarter on revenues of Rs 1,983 crore. The board of Jet Airways is meeting on October 25 to consider the financial results.
The Jet Airways stock slipped 11% to close at Rs 217.30 in a rising Mumbai market on Monday.
Tuesday, October 21, 2008
Friday, October 17, 2008
Layoffs in India
What Indian Law says about Termination
Forward by Kalyani
Termination of Employment
Existing regulations require companies to obtain government permission to close an operation or lay off workers in firms with 100 or more employees (service-industry companies, such as IT firms, are exempt). The Industrial Disputes Act, 1947 requires employers wishing to close an establishment to apply for permission at least 60 days before the intended closing date. If the government does not convey its decision within 60 days of the application, approval is deemed granted. A company can appeal against a rejection to the Industrial Tribunal.
Workers in an establishment that is closed illegally (that is, without approval) remain entitled to full pay and benefits. Dismissal for misconduct is allowed without notice under the Industrial Employment (Standing Orders) Act, 1959. The Payment of Gratuity Act 1972 entitles workers to a gratuity of up to Rs350,000 after five years of continuous service.
It is usually difficult for large companies to dismiss staff. Retrenchments and layoffs require full explanation to and prior approval from the state government. (Retrenchment under an agreement specifying a termination date requires no prior notice.) The last-in, first-out principle is usually followed.
Compelled by mounting competition to cut wage costs or consider moving out of high-wage locations such as Mumbai (Bombay), several companies have resorted to voluntary retirement schemes (VRSs) or redeployment. Beneficiaries under an approved VRS of a private-sector company are exempt from tax on monetary benefits of up to Rs500,000.
Termination of Employment
Existing regulations require companies to obtain government permission to close an operation or lay off workers in firms with 100 or more employees (service-industry companies, such as IT firms, are exempt). The Industrial Disputes Act, 1947 requires employers wishing to close an establishment to apply for permission at least 60 days before the intended closing date. If the government does not convey its decision within 60 days of the application, approval is deemed granted. A company can appeal against a rejection to the Industrial Tribunal.
Workers in an establishment that is closed illegally (that is, without approval) remain entitled to full pay and benefits. Dismissal for misconduct is allowed without notice under the Industrial Employment (Standing Orders) Act, 1959. The Payment of Gratuity Act 1972 entitles workers to a gratuity of up to Rs350,000 after five years of continuous service.
It is usually difficult for large companies to dismiss staff. Retrenchments and layoffs require full explanation to and prior approval from the state government. (Retrenchment under an agreement specifying a termination date requires no prior notice.) The last-in, first-out principle is usually followed.
Compelled by mounting competition to cut wage costs or consider moving out of high-wage locations such as Mumbai (Bombay), several companies have resorted to voluntary retirement schemes (VRSs) or redeployment. Beneficiaries under an approved VRS of a private-sector company are exempt from tax on monetary benefits of up to Rs500,000.
Wednesday, October 15, 2008
Layoffs in India
Jet Airways shows pink slips to 1,000 employees
Forward by Pooja
Riding the strength of its alliance with Kingfisher Airlines, another private carrier Jet Airways [Get Quote] has laid off up to 1,000 employees to rationalise its operations.
The entire force of unconfirmed staff is being laid off on a 30-day compensation package, a top Jet Airways official, who did not want to be named, told PTI.
The staff, which has been retrenched is from all across the operation and letters severing their services, were given on Tuesday, he said.
Jet Airways and Kingfisher Airlines, both of which account for 60 per cent market share in India had announced an alliance on Monday night to share their resources and routes.
Both Naresh Goyal of Jet and Vijay Mallya of Kingfisher are in Hyderabad to attend the Airshow.
“It is part of handling economic slowdown and carefully rationalising the operation,” the official said adding the downsizing is based on capacity, load-factor and traffic patterns.
The rationalistaion also seeks to optimise the operations in line with the rationalisation of its flight and he pointed out that the airline has stopped some of its existing flights including that to San Fransisco.
Earlier while announcing the alliance, both Goyal and Mallya had said that the coming together was in tune with the global practice of reducing killing costs and clarified that there was no equity involvement.
The alliance would work together on seven fronts, including route and code sharing as also sharing of crew, a move that would help them cut exorbitant cost that had been putting enormous pressures for the last 4-6 years.
News Update
Raj Thackeray threatens Jet Air over firing staff
Maharashtra Navnirman Sena chief Raj Thackeray on Wednesday said that no Jet Airways flight would be allowed to take off from Mumbai if the airline does not reconsider its decision to terminate the services of 850 flight attendants.
The MNS chief’s threat comes in the wake of the private airline’s decision to lay-off nearly 1,000 employees with a view to rationalise its operations.
Raj was talking to reporters after meeting a group of Jet employees, who called on him at his office ‘Rajgad’ in central Mumbai.
MNS activists will meet Jet officials on Thursday to discuss the issue.
Riding the strength of its alliance with Kingfisher Airlines, another private carrier Jet Airways [Get Quote] has laid off up to 1,000 employees to rationalise its operations.
The entire force of unconfirmed staff is being laid off on a 30-day compensation package, a top Jet Airways official, who did not want to be named, told PTI.
The staff, which has been retrenched is from all across the operation and letters severing their services, were given on Tuesday, he said.
Jet Airways and Kingfisher Airlines, both of which account for 60 per cent market share in India had announced an alliance on Monday night to share their resources and routes.
Both Naresh Goyal of Jet and Vijay Mallya of Kingfisher are in Hyderabad to attend the Airshow.
“It is part of handling economic slowdown and carefully rationalising the operation,” the official said adding the downsizing is based on capacity, load-factor and traffic patterns.
The rationalistaion also seeks to optimise the operations in line with the rationalisation of its flight and he pointed out that the airline has stopped some of its existing flights including that to San Fransisco.
Earlier while announcing the alliance, both Goyal and Mallya had said that the coming together was in tune with the global practice of reducing killing costs and clarified that there was no equity involvement.
The alliance would work together on seven fronts, including route and code sharing as also sharing of crew, a move that would help them cut exorbitant cost that had been putting enormous pressures for the last 4-6 years.
News Update
Raj Thackeray threatens Jet Air over firing staff
Maharashtra Navnirman Sena chief Raj Thackeray on Wednesday said that no Jet Airways flight would be allowed to take off from Mumbai if the airline does not reconsider its decision to terminate the services of 850 flight attendants.
The MNS chief’s threat comes in the wake of the private airline’s decision to lay-off nearly 1,000 employees with a view to rationalise its operations.
Raj was talking to reporters after meeting a group of Jet employees, who called on him at his office ‘Rajgad’ in central Mumbai.
MNS activists will meet Jet officials on Thursday to discuss the issue.
Thursday, October 9, 2008
Layoffs in India
More Job Cut coming for India IT Companies
Forward by Srujan
In the last few months the world has changed a lot and it will be never same again for years to come. All over the world, job cut has started seriously and major counties like US, Europe, Japan etc where India has a great interest so far as IT is concerned have already gone deep into economic downturn. Inspite of the best efforts of various concerned authorities in various countries, the situation has not improved at all. Major US companies have already announced big job cuts and they have already cut doen their IT spending for this year. This business strategy will cintinue in the coming days, considering the bad business conditions all over the world. It will definitely lead to more job cuts as SATYAM has done recently. Of course SATYAM may not be good company at all, beuase Raju is not taking much interest in that compnay because of his less stake in the company, but other IT majors like HCL, INFY, etc are soon going to cut jobs. They have already started cost cutting measures, and soon start job cutting also as a measure to cut cost with less business. Particular companies like HCL are very riskly. So try to stick to good companies never attempt to switch to companies like HCL for better job security ! In fact few days back one of my friend told me that his friend who was working in HCL, Chennai was fired abruptly with a 3 days notice period !! Be careful !
In the last few months the world has changed a lot and it will be never same again for years to come. All over the world, job cut has started seriously and major counties like US, Europe, Japan etc where India has a great interest so far as IT is concerned have already gone deep into economic downturn. Inspite of the best efforts of various concerned authorities in various countries, the situation has not improved at all. Major US companies have already announced big job cuts and they have already cut doen their IT spending for this year. This business strategy will cintinue in the coming days, considering the bad business conditions all over the world. It will definitely lead to more job cuts as SATYAM has done recently. Of course SATYAM may not be good company at all, beuase Raju is not taking much interest in that compnay because of his less stake in the company, but other IT majors like HCL, INFY, etc are soon going to cut jobs. They have already started cost cutting measures, and soon start job cutting also as a measure to cut cost with less business. Particular companies like HCL are very riskly. So try to stick to good companies never attempt to switch to companies like HCL for better job security ! In fact few days back one of my friend told me that his friend who was working in HCL, Chennai was fired abruptly with a 3 days notice period !! Be careful !
Wednesday, October 8, 2008
Bad Practices
IT firms send 11,000 Indians to UK every year
Forward by Sravanthi
London: Over 11, 000 foreign workers are being brought into Britain by Indian IT companies every year, prompting a trade union to question if the work permit system is being “abused” in the process
The Sunday Telegraph releases Home Office figures, which it says it obtained after a two-year battle under the Freedom of Information Act, showing that just six specialist Indian IT companies had recruited 11,644 immigrants to work for them in the UK in 2006, the most recent figure available.
The companies are Tata Consultancy Services, Wipro, Mahindra-BT, Mastek, Infosys Technologies and Satyam Computer Services.
Over a seven-year period these companies were granted work permits to bring 47,000 foreign nationals into the UK. Their annual total has climbed steadily every year since 2000 and has doubled since 2003.
The majority are thought to have been Indian nationals. The Home Office could not say how many have settled in the UK and how many have returned to their homeland.
Tata Consusltancy Services is the largest single sponsor of foreign workers. It secured permits for around 4,000 foreign workers in 2006 compared with less than 1,600 in 2000.
Much of the work of the six companies involves outsourcing, where British companies or public-sector organisations bring in a separate company to operate their computer system.
In some cases, companies have brought staff from India to Britain to learn about operations such as call-centres, before shutting down the British businesses and moving the staff back to India to replicate the operation there.
A British trade union, Unite, is questioning these figures. It says while it is possible that only foreign workers have the skills required for the specific jobs in question, the granting of work permits “should not be at the cost of resident workers”.
Unite is worried that the Indian companies may be “undercutting” British pay rates in the UK by securing work permits to foreign workers and paying them much less than what their British counterparts would earn in the same rank.
According to The Sunday Telegraph, British IT workers earned an average of £35,000 a year in 2006 while two-thirds of foreign-born employees in the same sector were paid under £30,000 a year. The figures include both employees on short-term and long-term work permits.
Peter Skyte, national officer of Unite, wrote in a report titled “The impact of the work permit scheme on IT professionals in the UK”: “The question needs to be asked whether the skills represented in these figures are not available in the UK, which would be a justifiable use of the work permit system, or whether these companies are bringing in non-resident work permit holders at below going pay rates in the UK, which would not.”
London: Over 11, 000 foreign workers are being brought into Britain by Indian IT companies every year, prompting a trade union to question if the work permit system is being “abused” in the process
The Sunday Telegraph releases Home Office figures, which it says it obtained after a two-year battle under the Freedom of Information Act, showing that just six specialist Indian IT companies had recruited 11,644 immigrants to work for them in the UK in 2006, the most recent figure available.
The companies are Tata Consultancy Services, Wipro, Mahindra-BT, Mastek, Infosys Technologies and Satyam Computer Services.
Over a seven-year period these companies were granted work permits to bring 47,000 foreign nationals into the UK. Their annual total has climbed steadily every year since 2000 and has doubled since 2003.
The majority are thought to have been Indian nationals. The Home Office could not say how many have settled in the UK and how many have returned to their homeland.
Tata Consusltancy Services is the largest single sponsor of foreign workers. It secured permits for around 4,000 foreign workers in 2006 compared with less than 1,600 in 2000.
Much of the work of the six companies involves outsourcing, where British companies or public-sector organisations bring in a separate company to operate their computer system.
In some cases, companies have brought staff from India to Britain to learn about operations such as call-centres, before shutting down the British businesses and moving the staff back to India to replicate the operation there.
A British trade union, Unite, is questioning these figures. It says while it is possible that only foreign workers have the skills required for the specific jobs in question, the granting of work permits “should not be at the cost of resident workers”.
Unite is worried that the Indian companies may be “undercutting” British pay rates in the UK by securing work permits to foreign workers and paying them much less than what their British counterparts would earn in the same rank.
According to The Sunday Telegraph, British IT workers earned an average of £35,000 a year in 2006 while two-thirds of foreign-born employees in the same sector were paid under £30,000 a year. The figures include both employees on short-term and long-term work permits.
Peter Skyte, national officer of Unite, wrote in a report titled “The impact of the work permit scheme on IT professionals in the UK”: “The question needs to be asked whether the skills represented in these figures are not available in the UK, which would be a justifiable use of the work permit system, or whether these companies are bringing in non-resident work permit holders at below going pay rates in the UK, which would not.”
Tuesday, October 7, 2008
Layoffs in USA
EBay cutting 1,600 jobs, 10% of work force
Forward by Pooja
After a series of changes designed to draw more people to its online marketplace, eBay Inc.’s latest alteration is aimed at its own employees. The auction site operator said Monday it will cut about 1,600 jobs, 10% of its work force, in its largest round of dismissals ever.
About 1,000 full-time employees will be gone, while eBay will achieve the rest of the cuts by letting temporary and part-time workers go and by leaving open positions unfilled. EBay would not describe which positions would be cut, other than to say they will come across the company and around the world.
EBay chief executive John Donahoe said in an interview that the cuts were not a reaction to the weak economy. Investors were still disheartened, sending eBay shares to a 5-year low.
Donahoe, who took over as CEO from Meg Whitman in March, said eBay’s leadership had been thinking about making the cuts since midsummer. The moves will make eBay “more responsive and nimble,” he said, and will give it an opportunity to reinvest in growth areas like its online payments service PayPal and its classified-ads business both of which eBay augmented with acquisitions announced Monday.
EBay anticipates $70 million to $80 million in restructuring charges related to the job cuts, mostly in the fourth quarter. The company said the cuts will result in $150 million in annual cost savings.
This round of cuts is eBay’s second this year. The company said in March that it would cut 125 positions in Europe and North America, including 70 jobs at its San Jose, California headquarters.
EBay has struggled to match competition from other areas of e-commerce, with many consumers increasingly using more online retailers like Amazon.com Inc. that follow a more traditional selling model. In the second quarter, eBay’s count of “active users” rose just 1.4%.
Already this year, eBay has altered the fees that vendors pay, its search results and its feedback system in an effort to improve the experience for buyers and keep them coming back. But the changes have also angered a number of sellers, some of whom have left the site.
Donahoe did acknowledge that the weak economy and the effects of the strengthening dollar are hurting eBay’s business. Third-quarter revenue will be at the low end of the company’s expectations. Nonetheless, eBay said its third-quarter earnings would be higher than it had predicted in July.
EBay also said Monday that it will purchase Bill Me Later, a privately held company that lets online retailers give shoppers credit without detailed application forms, for about $820 million in cash and $125 million in outstanding options. The Timonium, Maryland-based company is expected to become part of PayPal by the end of the year. Shoppers should be able to use the Bill Me Later service on eBay’s sites in the second half of 2009, PayPal President Scott Thompson said in an interview.
After a series of changes designed to draw more people to its online marketplace, eBay Inc.’s latest alteration is aimed at its own employees. The auction site operator said Monday it will cut about 1,600 jobs, 10% of its work force, in its largest round of dismissals ever.
About 1,000 full-time employees will be gone, while eBay will achieve the rest of the cuts by letting temporary and part-time workers go and by leaving open positions unfilled. EBay would not describe which positions would be cut, other than to say they will come across the company and around the world.
EBay chief executive John Donahoe said in an interview that the cuts were not a reaction to the weak economy. Investors were still disheartened, sending eBay shares to a 5-year low.
Donahoe, who took over as CEO from Meg Whitman in March, said eBay’s leadership had been thinking about making the cuts since midsummer. The moves will make eBay “more responsive and nimble,” he said, and will give it an opportunity to reinvest in growth areas like its online payments service PayPal and its classified-ads business both of which eBay augmented with acquisitions announced Monday.
EBay anticipates $70 million to $80 million in restructuring charges related to the job cuts, mostly in the fourth quarter. The company said the cuts will result in $150 million in annual cost savings.
This round of cuts is eBay’s second this year. The company said in March that it would cut 125 positions in Europe and North America, including 70 jobs at its San Jose, California headquarters.
EBay has struggled to match competition from other areas of e-commerce, with many consumers increasingly using more online retailers like Amazon.com Inc. that follow a more traditional selling model. In the second quarter, eBay’s count of “active users” rose just 1.4%.
Already this year, eBay has altered the fees that vendors pay, its search results and its feedback system in an effort to improve the experience for buyers and keep them coming back. But the changes have also angered a number of sellers, some of whom have left the site.
Donahoe did acknowledge that the weak economy and the effects of the strengthening dollar are hurting eBay’s business. Third-quarter revenue will be at the low end of the company’s expectations. Nonetheless, eBay said its third-quarter earnings would be higher than it had predicted in July.
EBay also said Monday that it will purchase Bill Me Later, a privately held company that lets online retailers give shoppers credit without detailed application forms, for about $820 million in cash and $125 million in outstanding options. The Timonium, Maryland-based company is expected to become part of PayPal by the end of the year. Shoppers should be able to use the Bill Me Later service on eBay’s sites in the second half of 2009, PayPal President Scott Thompson said in an interview.
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