The Trade Development Council is set to lay off some of its 700 staff who failed to meet goals under a retraining programme. But unions warn the move - which comes a day after Financial Secretary Donald Tsang Yam-kuen forecast unemployment could drop to three per cent by the end of next year - will trigger widespread fears of further job losses. Under the council's scheme, laid off staff would be compensated by up to nine months' salary. Details of the plan were circulated to staff in a memo on Monday. Council spokesman William Cheung Chee-fai said the move was necessary to ensure all staff could meet the changing operating environment. He pointed out that technology had transformed the nature of staff's tasks. But he said management would retrain employees for new posts before resorting to lay-offs. He said the council had not set a time-frame for the plan or a target for the number of lay-offs. The council said it was not a redundancy scheme but aimed at 'making full use of the vacancies'. Mr Cheung added that the council would continue to hire staff to ensure manpower [levels] remained unchanged. The council is a government-subsidised statutory body that promotes Hong Kong trade and industry. Hong Kong Confederation of Trade Unions' organising secretary Wong Ying-yu said he was shocked by the council's sudden move because the body was seeking to expand its services. The confederation represents 51 unions. Mr Wong said he believed the council was aiming to replace senior employees with cheaper staff to save money. He warned the announcement would damage sentiment in the labour market. 'People are expecting more job losses over the next couple of years,' Mr Wong said.