Fired or not, Decide!!

Tuesday: Jet Airways and Kingfisher Airlines enter into a ‘strategic alliance’.

Wednesday: Jet Airways announces it will lay off 1800 employees who were on probation.

Thursday: Naresh Goyal, chairman of Jet Airways, reverses the decision saying it’s a ‘conscience call’.

This was the sequence of events that panned out in the last few days. There are some very important aspects which I felt compelled to discuss.

Given the general economic slowdown and the specific problems that the aviation industry is facing, cost cutting measures are inevitable. Hence the management would have spent considerable amount of time to deliberate this decision. Given the recent alliance this step indicates a well thought out plan to save the airline from going bust. Now the sudden change in decision is a complete shocker.

Let’s consider Naresh Goyal’s statement that he felt guilty after sacking his employees purely on face value. A seasoned businessman like him would not confront logic with emotion. As a manager you would have to take tough decisions to solve problems. I understand the pain of firing employees but I am sure it would have been done after considering all other options. The company is at stake, creditors are waiting for their payments, revenues are dropping and thus you need to cut the flab. From a managerial perspective this event is a sham. You take a decision after due consideration of all factors (moral and conscience as well) and then let things play out. It would be interesting to observe Jet’s future now.

Another possibility could be political pressure. We had one minister go on air and claim he had a ‘chat’ with Mr. Goyal. Another extreme right wing politician was seen ‘listening’ to the fired staff’s woes. There was more than a hint of potential trouble. The dilemma remains, should politicians interfere in business????

Naresh Goyal made it clear that he was not party to the original decision. It was a rather naïve statement, come on, we are in India, the promoter (and chairman in this case) has to have a say in such a critical decision. Imagine how red faced the CEO will be when he read the statement.