As part of a major shakeup, Hong Kong’s flagship airline Cathay Pacific announced today that it would be firing 600 employees in the biggest job cuts since the Asian Financial Crisis in 1998.
A source confirmed with the SCMP this morning that 190 management jobs would be culled immediately and 400 non-management staff would be let go in the next couple of weeks. A further 200 people are expected to be made redundant afterwards, bringing the total jobs lost to 800.
Sources told SCMP that the personnel from the cargo, finance, and human resources departments would be axed in the coming months. The cargo unit will also be restructured.
The cuts, which mark the first stage of a three-year program to recoup losses, is new CEO Rupert Hogg’s first major move since taking up the mantle from Ivan Chu this month. In a statement today, Hogg said, “We greatly appreciate and respect our people’s dedication, hard work and achievements. However, we have had to make tough but necessary decisions for the future of our business and our customers.”
“Changes in people’s travel habits and what they expect from us, evolving competition and a challenging business outlook have created the need for significant change.”
Last year, the embattled carrier posted its first loss since the 2008 financial crisis following a fuel hedging disaster and growing competition from budget regional airlines. In the last year, Cathay Pacific and subsidiary Cathay Dragon (formerly Dragonair) have lost a combined HKD3 billion; losses were offset by the company’s other businesses, such as catering and shares in Air China.
The cuts mark the biggest layoffs at Cathay since the Asian Financial Crisis in 1998, when 800 jobs were axed. Around 25 percent of management staff and 18 percent of non-management staff have lost their jobs; frontline staff, pilots and cabin crew are safe but expected to “deliver greater efficiencies and productivity improvements”.
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