Hongkong Telecom is to cut wages for its 13,800 staff by 10 per cent. Those who do not agree by November 1 will be sacked. The telecommunications giant said the cuts would help it to save more than $300 million a year. About 30 top executives were not affected because their pay had been cut by 10 per cent two months ago, the company said. News of the cuts by one of the territory's biggest employers came hours after the Government revealed unemployment had hit five per cent, its highest level in 15 years. Almost 500 jobs a day had been shed in August, according to the latest figures. Telecom chief executive Linus Cheung Wing-lam, among those who took a 10 per cent pay cut two months ago, said the action was needed to avoid mass sackings. 'If we don't cut salaries, we might have to lay off staff. We are talking of thousands of people and not only staff; their spouses and children would suffer too. Hong Kong is going through a difficult period that coincides with substantial liberalisation of the telecommunications industry,' he said. 'We have bitten the bullet and we are making a difficult decision to implement a 10 per cent across-the-board salary cut.' The company, which dismissed 270 managerial staff in July, had no plans to lay off others, although there could be no guarantee, he said. Staff said that the company was 'mean' and did not care for workers who faced financial hardship. Ip Kwok-fun, a Hongkong Telecom employee for 20 years and chairman of the Hong Kong Telephone Co Ltd Staff Association, said the cut would cost him $2,000 a month. He said most workers had been with the company for at least 10 years and made about $10,000 a month. 'One thousand dollars off their pay cheque would be a big blow to them. They have to pay their mortgage and support their families. 'It's unfair for a company that's profiting to punish its workers just to keep profit levels high. It's unacceptable,' said Mr Ip. He said the union had surveyed Telecom employees and found that 90 per cent were opposed to salary cuts. The ones who thought cuts were acceptable said they would not take more than a four per cent pay reduction. Legislator Lee Cheuk-yan said Mr Cheung had told him yesterday that the parent company, Cable & Wireless, wanted Telecom to cut salaries so that profits could be maintained. Mr Cheung said he wanted profits to at least be in single digits and to save $300 million with the salary cuts, said Mr Lee. 'I asked him to consider early retirement or other schemes that would be less painful for workers, but he said he wanted it to be more simple,' he said. 'They care more about their major shareholder in England. The shareholder wants money to invest in its company,' Mr Lee said. Mr Cheung denied the decision was made under pressure from Cable & Wireless. He said the company faced keen competition. The company's net profit increased 52 per cent to $17 billion for the year ended March 31, boosted by a $6.7 billion payout from the Government for the early termination of its international licence monopoly. Ignoring the payout, profits grew by 11.6 per cent.