SpiceJet Faces Sell-off After Clearing Layoff of 1,400 Employees

SpiceJet Faces Sell-off After Clearing Layoff of 1,400 Employees

VoM News Desk | February 12, 2024 | 03:40 PM IST | Travel | Follow on Google News

SpiceJet Faces Sell-off After Clearing Layoff of 1,400 Employees/HT_Print

SpiceJet Faces Sell-off After Clearing Layoff of 1,400 Employees

SpiceJet shares witnessed over 5 percent decline in intraday trade after the aviation company announced plans to lay off 1,400 employees. Despite opening positively at ₹68.50 per share, the stock hit an intraday low of ₹65, marking around a 16 percent retracement from its recent 52-week high of ₹77.50. The layoff move aligns with SpiceJet’s cost-cutting strategy to address its ongoing cash crisis.

Immediate Selling Triggered by Cash Crisis

Avinash Gorakshkar, Head of Research at Profitmart Securities, pointed out that SpiceJet is grappling with a cash crisis, leading to the immediate trigger for selling in its shares. The layoff announcement, aiming to cut 1,400 jobs, is seen as a short-term move to alleviate financial pressures. The market awaits more information to discern if additional measures are forthcoming or if this is a temporary announcement.

SpiceJet Share Price Outlook and Caution for Shareholders

Sumeet Bagadia, Executive Director at Choice Broking, highlighted that SpiceJet’s share price is currently trading within the ₹65 to ₹75 range. The outlook suggests that a bullish or bearish trend may emerge based on a breach of this range. Shareholders are advised to hold the stock with a strict stop loss at ₹65. Fresh investors are recommended to wait for further developments. A break below the ₹65 support level may lead to a decline to ₹50 per share, while surpassing the ₹75 resistance could signal a fresh uptrend in the aviation stock.

SpiceJet Plans Layoffs Amidst Financial Woes

Crisis-ridden SpiceJet announced its intention to lay off at least 1,400 employees as part of a broader effort to reduce costs and streamline operations. The move comes in response to the airline’s financial challenges, legal battles, and excess manpower compared to the current number of operational aircraft. The final decision on the extent of layoffs is expected this week, reflecting the company’s efforts to navigate through ongoing challenges.

VoM News Desk

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