JET NARESH-WAYS

The late night press conference by a visibly emotional Naresh Goyal, the Chairman of Jet Airways, is very significant for the Indian corporate sector, especially the aviation sector. Not only that Mr. Goyal reinstated all the staff that were recently retrenched, he put staff welfare over business economics and management strategy. He called the staff as members of family, comparing them to his 19 year daughter on many instances and asked them decide how to take care of the economic situation. Whether Mr. Goyal did it under pressure from the tremendous media attention the layoff received or from political figures, he sounded very genuine about his concerns for the company’s staff. He questioned management’s decision to cut costs by laying off staff in the lower salary brackets.

This action will of course be welcome by one and all, except those in the company worrying about the plunging bottom-line. However, time and again, it has been proved that if employees put their heart and mind to work, the company usually comes out stronger and more profitable than the competition. Southwest airline is one such example which has both employee satisfaction and profitability have always gone hand in hand. While lay-offs during times of economic downturn have been common in the IT industry at a large, Infosys, has never laid off staff for such reason. Mr. Narayana Murthy and other senior management members have always found alternates to retrenchment such as re-training and redeployment. Answering questions regarding the huge cash reserves Infosys keeps, NRN says Infosys should be able to sustain itself even if there is no business for the company in an year.

This event will definitely create tremendous pressure on other companies who might be contemplating staff layoffs as a last ditch effort to counter the current economic situation. And what about those who receive employment offers and then they are sent regret letters? Should they be entitled to some benefits as well? In a free economy employment is always at will and this applies to both sides. In India and other countries where there is no social security and opportunities for employment are not equal, layoffs would cause the kind protests we have seen in the case of Jet. In the worst case, it has led to violence and the recent killing of a CEO of an Italian Multinational in Noida is a case in point. Hence, staff layoffs have to be handled very carefully and with compassion and proper planning. I don’t know how Jet management planned the layoffs but I would avoid the following:

a. Not telling people that their jobs have been taken away till they are waiting for their transport to arrive for them to report for work
b. Not informing the employees regarding economic conditions and state of finances for the company and what actions the company has already taken and are planned for future.
c. Not informing the employees either in person or in writing till they found out from friends and team leaders about the retrenchment
d. Letting go of such a large number at one go and not reducing staff from middle and senior management
e. Not paying some kind of financial compensation, ideally three months pay, at least one month pay.
f. Lay-offs just before a major national festival like Deewali, when people shop and gift the most


Anyways, Kudos to Mr. Goyal for being a businessman with a big heart! Time will tell how this event influences the airline’s future.