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Cathay Pacific Airways earlier stated that 600 of 3,000 head office jobs would be cut with no department spared except for frontline staff such as pilots and cabin crew. Photo: Edward Wong

Cathay Pacific slashing 400 jobs as part of redundancy plan

Cuts come under earlier announced restructuring measures, with total of 600 layoffs expected

Troubled Hong Kong carrier Cathay Pacific Airways is laying off about 400 staff at its Lantau headquarters, the biggest cut in two decades, as part of its recently revealed redundancy plan, the Post learned on Thursday.
The layoffs are expected to be carried out by June 22, a month after the plan was announced. On May 22, the company said 600 of 3,000 head office jobs would be cut with no department spared except for frontline staff such as pilots and cabin crew.

“The majority of affected employees will be informed of changes or a cessation to their role today and over the next month, with most of the restructuring completed by the end of 2017,” according to Cathay Pacific’s statement at that time.

The airline is seeking HK$4 billion in savings over the next three years, with HK$2 billion targeted for this year.

The 400 jobs affected are non-managerial in nature and account for 18 per cent of non-management positions. Those laid off will receive a package of 12 months salary, extended medical benefits and counselling, the company said.

The majority of affected employees will be informed of changes or a cessation to their role today and over the next month
Cathay Pacific statement

An internal circular the Post obtained on Thursday, confirmed that another batch of junior staff, as well as some higher but below managerial ranked employees would get the axe.

But those from engineering, flight operations, people, training, cargo, finance, secretarial and administration support teams would be spared.

“There will be a short transition period from now until the new head office structure is fully effective from August 1,” the notice stated.

A dedicated hotline was also set up to assist affected staff.

The Cathay Pacific Local Staff Union said the number of job losses was “less than expected” and urged the company to try to minimise the impact of restructuring through natural wastage – not replacing staff who leave.

A letter from chairman Joe Chu Yin-cheong stated that the union was also bargaining for better severance packages for both contract and permanent staff, while priority would be given for future openings.

There were few signs of unrest outside Cathay City – the company’s headquarters – on Thursday, as the latest job losses were part of the announced restructuring plan and not out of the blue.

Cathay Pacific and Cathay Dragon lost HK$3 billion last year, but the company as a whole lost HK$575 million because of better performances in other areas of the business, including catering and its shareholding in Air China.

Cathay also struggled after two years of substantial fuel hedging losses amounting to HK$8.4 billion each year in 2015 and 2016. The losses were absorbed into the overall fuel cost.

In Asia, Cathay’s rival, Singapore Airlines, indicated on Wednesday that many jobs might become “irrelevant” as the loss-making mass carrier embarked on a “radical review” of its business.

This article appeared in the South China Morning Post print edition as: Cathay Pacific reveals 400 jobs to go at Lantau HQ
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