Jet Airways has let go of hundreds of employees, a day after tying up with Kingfisher Airlines, in the first, visible manifestation of the global economic crisis hitting home.
Union civil aviation minister Praful Patel says it is an internal company matter of human resources and the government has no role to play. The Jet management avers that these job losses are imperative to save the jobs of others and to see the company through this downturn.
Meanwhile, the politicians have jumped in. Petroleum minister and Bombay Congress strongman Murli Deora has slammed the job cuts, and Raj Thackeray of the Maharashtra Navnirman Sena (MNS) has threatened to ground Jet in Bombay. The left parties, usually very vociferous, have remained silent.
Are such abrupt job cuts a sign of the times, or a shape of things to come? Or, are the airline owners using the “aviation crisis” to balance their books to enhance “shareholder value”? Is it right or wrong to drop the young employees like hot potatoes at the first sign of trouble?
Indians should realize that to enjoy capitalism, they should be willing to get fired or else go back to socialism. If a business has unproductive manpower, it has every right to shed it
+1 for MallaPottell
As for as the govt role that is stupidity companies are capitalistic when they make profit and want turn to socialism when making losses. Kudos to all the financial geniuses nobody saw what was coming? Our own trio(Chidmabaram, Montek and Manmohan) are beating chests that our fundamentals are strong…they are just lucky till not long back they wanted to turn India completely capitalistic. Our current % of capitalism is just right I guess.
US has Capitalism and it has got its own safety mechanisms as well.
Hire and Fire has matured in US. Any individual can declare foreclosure in case he or she has taken any loans and walk away. There is a social security net in place. So atleast for any basic sustenance the taxes which he paid during the course of his job are of help, when the individual does not have a job.
In contrast the situation in India is very different. Suppose an individual looses his job, then he does not have any form of life support. The Bankers will hire goondas to retrieve the money. The individual cannot foreclose any loans. The Goondas either are based out of Pakistan or Middle East and they have their employees who run around with knifes trying to threaten the individual.
Government in India has in a way institutionalised Goodaism by supporting bankers to use such methods.
Indian Citizens will need to protect themselves against such reckless methods of soft capitalism existing in India. It is neither Capitalism nor socialism but Goodaism.
yes, this is the bane of capitalism.. But its also total lack of business vision, forecasting on Jet Airways. Looks like they were screwed up from a long time. They are just using the downward sentiment to announce layoffs, so their actions get justified easily.
How about the board sacking Naresh Goyal?
It works both ways. If an employee has no loyalty and can chuck a job after getting due training and experience and more often leaving the employer in the lurch, why cannot an employer do so- either depending on the performance or his necessity ? After all a Company is answerable to share holders also. In this particular case when the Airlines are returning wet leased planes back to the owners, what can they do with the surplus employees ? Allow them to stay on board and wait till the Company declares bankruptcy ?
What MallaPottell said….
and we must remember that if our labour laws are not flexible enough to do this, then these people wouldn’t have had the jobs in the first place.
With even Air India sending people home, I think there is little the government can do about this.
All the hiring policies of these company s were based on the exponential growth of sensex. Now that the situation has changed, everyone is blaming it on global economy and trying to cut down expenses/staff/branch offices etc.
Actually greed of Indian business s has played a greater role in this slump than the global crash. Now, Hawala market is working overtime. Cash is being siphoned to places where it came from. Govt is silent on this issue as bigwig politicians are involved.
As usual, the common man will have to bear the burnt of this slowdown
Jet has reinstated all sacked employees. Take that!
Jet agrees to take back all the employees it sacked earlier. And it does so after the govt agrees to a 4700 cr bail-out package. All this drama of sacking employees was then to get money from govt. And like a fool (or not!) the govt is now going to bail-out both Jet and KF. Wah India!
The latest news is that Jet wants to take back all the employees. Possibly this was done under pressure from the government. If so, this could set an interesting precedent.
Looks like Goyal is taking back the employees.
Nice trick by Naresh Goyal to eek out a handout from the gov’t.. sacking the employees then taking them back the next day and making sure it gets extra wide coverage ;)
But OTOH the sacked employees were 20 somethings and they start cribbing like 50+ gov’t employees.. wtf ?
…and by the way the employees are back on the job…
Next time they’ll be fired one by one…
Apparently Goyal could not sleep…
Well, today’s news reports say Jet has dropped the plan.
I second MallaPottell’s comments.
The latest news is that Jet took back all of its employees. While I am happy for the employees of Jet, I think this decision was pretty hasty, and was probably taken under some politician’s pressure. Air India might follow the same steps and take back its employees now. Its all turning into a sad joke!
PS: I found your blog through SL Bairappa’s interview. I heard about his article in yesterday’s vijaykarnataka from a friend. I am unable to access it online, so is there anyway you could post it on your website?
Welcome to India. This is a very bad example. Jet should not have buckled to these tactics. If India wants to rise, the country should immediately push for at will firing. It really works quite well. You don’t put out – get out. We need to save costs – get out. Goondagiri/babugiri is the driving force now controlling big companies. Well, I suppose its better than being beaten to death.
If you are willingly part of game where risks are as much part as reward is then, you dont act like a cry baby. If these jet employees dont want to take risks of getting laid off, then they could join low paying but more stable government jobs. In addtion to this, these guys have setup a wrong precedence by approaching political party like MNS which on another day woudn’t think twice before turning againt them in name of marathi culture or some other pretext.
This fiasco shows how poorly Jet is managed. How is it possible that such a strategis decision was taken without the knoweldge of the chairman? if the chairman knew of the decision and he is pretending now under political pressure as though he did not know it it reflects poorly on his judgement and also violent behaviour of our political class.
India has its own brand of capitalism where political class is also a silent or active partner without putting its own capital. Tata’s paid heavily for ignoring the interests of political class while deciding on Singur. Jet was above to pay in a similar way had they not taken back their employees.
Unless India develops a system to keep out the political class from the decision making in managing the business, we will be just muddling through the development process which will only help the rich and the political class.
There is one more example of political class making crores by interfering in a non violent way. When crude oil price was going up, UPA with the help of communist party decided not to allow the cost pass through and to continue the process of subsidizing the rich and middle class. What this has done was to force Reliance to close their brand new service stations and allow the dealers of LPG to divert residential LPG to commercial sector to make crores.
As Goyal admitted that it was all due to some management hair brain, who took the decision to sack 1900 employees at one go.
I agree with him completely and think that his management staff is really stupid because;
1)If one wants to save money they need to go for the middle/high level managers with fat salaries and not entry level chaps.
2) even if one wants to cut the entry level guys they should have done it in phases instead of at one stroke calling the attention of the whole country and Pakistan too!
3)Believing capitalistic ways work in India as easily as it works in USA, is down right stupidity
To conclude Jet Airways management has bungled thoroughly and it would do the co some good if some management guys are shown the door.
Political oneupmanship over Jet firing its employees/trainess are more dangerous to India, its prosperity, than CPIM/Mamata fighting on Singur and eventual flight of Tata.
At least Modi could give home to Nano. But who will save us from Raj/NCP?
Its most dangerous escalation. Very bad days ahead of Indian industry, economy.
Yes. Right. Politicians always play their cards. Where is now Mamatha after Tatas rolled out of Singur, is she still fighting for those farmers or closer home where was the Ahinda cause after much show off some two years back? Politicians can’t be believed.
Also, to say that Jet Airlines Chief Goyal was unaware of the laying off such huge number of employees is like “Bekku kannu muchchi kudida haage”.
This all clearly shows that India is becoming increasingly becoming capitalistic. Is there any way to escape? Globalisation and Liberalisation has rendered it so. IT, BT, BPO, ITES are capitalistic forces. So hire and fire is a part of it. Hence we are witnessing job cuts, cost cuts etc. And we are also seeing our dear newspapers and TV channels reporting and portraying in all enthusism!
India saw huge wealth and booming economy is because of these things only, to say in the last 10-12 years. Did anyone dreamt of getting 25-30k salary per month in late 1980’s or before that?
That whether we need these aviation services or IT BT BPO ITES or go back to Nehruvian socialism is a topic of debate. Also one can’t deny the fact that this episode has ringed a alarming bell in many people’s ears.