Air India likely to lay off 200 employees amidst Tata Group's aviation business reorganisation

In a move towards streamlining its operations, Air India, under the umbrella of the Tata Group's aviation business, is set to lay off approximately 200 employees.

As reported by The Economic Times, less than 1 percent of Air India's workforce will be affected by the layoffs, as they have opted out of voluntary retirement plans or have not taken advantage of the company's reskilling initiatives.

Air India, which has a workforce of over 18,500 employees, contrasts with its sister carrier Air India Express, employing more than 6,200 personnel. Notably, when the Tata Group acquired the airline, the total employee count stood at 12,085, including contract workers.

Since its acquisition in January 2022, efforts have been underway to revamp Air India's business model and enhance its profitability. During the privatisation process, an agreement between the government and the new owners stipulated the retention of every employee for a year. Subsequently, over 2,500 workers availed themselves of the airline's voluntary retirement plans in two phases, as previously disclosed.

A spokesperson for Air India assured that the company is adhering to all contractual obligations throughout this transition period. The retrenched staff will receive a compensation package equivalent to 15 days of income for each year of service with the airline.

Highlighting the broader transformational agenda, the spokesperson stated, "As part of our multi-year transformational initiative, we are witnessing the emergence of the new Air India." The restructuring includes assigning roles to employees in non-flying functions based on organizational requirements and individual merit.

To facilitate this extensive staff restructure, Air India has enlisted the expertise of Boston Consulting Group. The airline has revamped organisational positions, onboarded fresh talent, and aligned wages for existing employees with those of new hires as part of this project.

The move underscores Air India's commitment to building an agile and effective organisational structure that aligns with its business model, supporting its expansion and ambitions in the aviation sector.