HRM Case

Study
Jet Airways: Coping with
Turbulent Times in the Indian
Aviation Industry

Harshit Gupta ,Mba(Tech) Chemical - 205

 HR Problems at Jet Airways: Coping with Turbulent Times in the
Indian Aviation Industry

Introduction:

In October 2008, Jet Airways (India) Limited (Jet), one of India’s leading domestic airlines, decided to
lay off more than 1,000 employees to streamline its operations. The cost-cutting was the second
phase of its downsizing operations.

The first phase, which took place a day earlier, saw the airline showing the door to 850 cabin crew
members. The second phase of downsizing included employees from all operations - cabin crew,
pilots, ground staff, and airport services staff, and employees from management departments.

The sudden decision not only took the employees by surprise but also caused alarm in the Indian
aviation sector. Amidst great public outburst and opposition by various organizations and political
parties, Naresh Goyal , chairman of Jet, reinstated the employees a day later amidst great emotional
drama. He was quoted as saying he had been appalled by the downsizing of his employees, which he
claimed, he had come to know only through media reports.

He added that he would "not be able to live as long as he lives" with the tough decision his
management had taken and clarified that he was taking back the employees as they were "family to
him and as head of the family he would take care of them.

A month later - in November 2008, Jet announced that it would consider serious salary cuts for its
staff to handle the aviation crisis.

While many Human Resource analysts were surprised by the turn of events that had led to the
reinstatement of the sacked employees, they opined that Jet had been forced to take drastic
decisions such as laying off employees or initiating pay cuts because of the turbulent phase through
which the aviation industry was passing.

HR Issues, Management and Decision Making at Jet

According to the company, Jet paid the utmost importance to the composition of its senior
management and its human resources with emphasis on teamwork as a key success factor. But due
to the turbulent times in the Indian aviation industry they had to take hard decision to lay off 1900
staff members with most of them consisting lower grade staff .Another reason given for this massive
exercise was to “Streamline Operations”

These layoffs were announced overnight without any prior notice to the employees with a 30 day
compensation package. No company would know of a risk overnight, it’s built over a period and
there should not be any drastic decision which may endanger its employees. The role of HR
executive is important to ascertain that people’s interests are not left aside in the race for profits.
The HR executive to ensure no discrimination in pay cut and lay off.
The very existence of the company was because of its employee and they are more than a resource
to the company. The company operates in service sector that focuses directly on customer
satisfaction while its employees are hanging on dagger of getting pink slips

Lesson Learnt by Jet Airways in the Odd Times of Retrenchment

 When going for bulk retrenchments, plan meticulously, weigh pros and cons of the action.
 Before reaching to decision, make environment conducive to acceptance of decision.
 In times of downsizing, trust and work satisfaction and HR manager's personal influence
matters most. It was completing missing in Jet issue.
 Employees like of Jet (white collared, educated and logical )should be dealt sensitively with
dignity and in a painless way.
 Employees should be counselled in advance, to prepare them mentally to accept the hard
realities of the business situations.
 HR should have initiated efforts to rehabilitate them well before such action. This would
have lessen their pain.IT was completely missing here.
 Though the decision of the management was justifiable and correct in the circumstances,
but the methodology of implementing the decision and timing was completely wrong.
 It will have serious implications on corporate India in future in respect of Industrial relations
scenario when you deal with Gen-Y class of employees. After Noida killing this Jet episode
issue is bound to send negative wives among middle working class.

To Conclude instead of seeking overnight solutions they should meticulously plan and properly
enact.