Tata-owned Air India Implements Strategic Workforce Restructuring Amidst Industry Transformation

Tata-owned Air India has undertaken a workforce restructuring by laying off more than 180 non-flying employees who were unable to avail themselves of voluntary retirement schemes (VRS) and re-skilling opportunities in recent weeks, as reported by PTI. Since Tata’s acquisition of the airline in January 2022, concerted efforts have been made to overhaul the business model, aiming for greater efficiency and effectiveness.

A spokesperson for Air India highlighted that employees in non-flying roles were assigned positions based on organizational needs and individual merit, following a meticulous assessment process spanning over 18 months. Despite multiple VRS offerings and opportunities for re-skilling, approximately one percent of the workforce found themselves unable to adapt, leading to their departure from the company. While the exact number of affected employees wasn’t disclosed, the spokesperson reassured that all contractual obligations would be met.

Since the takeover, Air India has extended two rounds of VRS, indicative of the ongoing transformation under Tata’s stewardship. The spokesperson underscored the significance of initiatives like Vihaan.AI, a multi-year transformational endeavour aimed at crafting a more agile and effective organizational structure in alignment with the evolving business model, facilitating expansion and ambitious goals.

In parallel, recent statistics on domestic air traffic revealed a 4.8 percent year-on-year increase, totalling ₹1.26 crore passengers last month. However, despite this growth, over 1.55 lakh passengers experienced flight delays during the same period, highlighting ongoing challenges within the industry. Notably, Air India’s market share saw a modest rise to 12.8 percent in February, while IndiGo’s share marginally decreased to 60.1 percent from 60.2 percent in January.

These developments underscore the dynamic landscape of the aviation sector, where companies like Air India are navigating operational transformations amidst fluctuating market dynamics and evolving customer demands. As Tata continues to steer the airline towards greater efficiency and competitiveness, such strategic maneuvers are essential for sustaining growth and relevance in the ever-changing aviation industry landscape.

(with inputs from agencies)

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