Cathay Pacific downsizes following first loss in eight years
HONG KONG-based carrier Cathay Pacific will axe 600 jobs as part of a major restructuring program following its first loss in eight years.
In a press statement, the airline said the changes would affect senior, middle management and non-managerial roles at the group’s headquarters in Hong Kong. No frontline employees, pilots, or cabin crew will be affected.
Cathay Pacific chief executive officer Rupert Hogg said, “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.
“Our immediate priority is to support our colleagues affected by today’s announcement, and I’d like to thank them for all they’ve done for Cathay Pacific.”
The statement said all employees made redundant would receive a severance package including up to 12 months’ salary, extended medical benefits including counseling and support as well as additional and extended travel benefits.
Andrew Lee, an analyst at Jefferies in Hong Kong, told Bloomberg, “Everyone is becoming more and more cost conscious. To be able to survive, they need to control costs. I think it is a start.”
According to South China Morning Post, Cathay is taking on a three-year HKD4 billion (US$51 million) cost-saving exercise to overhaul the business after recording a HKD575 million (US$73 million) loss in the last financial year.
Chairman John Slosar told the publication, “It is not a business you can turn on a dime. We are telling you today we have a plan for what we are going to do, we are putting it in place, and we have the team to do it.”
The restructuring is the biggest revamp the airline has undergone in 20 years.