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.