Cathay Pacific to shed 30% of head office workforce
This news comes a day after Cathay Pacific Group reported losses of S$104 million for 2016.
Hong Kong air carrier Cathay Pacific Airways is reducing headcount at the Hong Kong head office by 30%.
The redundancies will affect mostly middle and senior management roles, although not much else is known based on an internal company memo.
It is also unclear how the redundancies will be carried out, and whether they will be conducted with the advice of labour unions.
The airline currently employs over 22,866 employees in Hong Kong.
This news comes a day after Cathay Pacific Group reported an attributable loss of HK$575 million (S$104 million) for 2016, down from a profit of HK$6,000 million (S$1.08 billion) in 2015.
The airline attributed the loss to “intense and increasing competition with other airlines”, which it said was the most important factor.
Other airlines significantly increased capacity, and there were more direct flights between Mainland China and international destinations. Competition from low cost carriers also increased.
Cathay Pacific initially benefited from low fuel prices, but the benefit was reduced by fuel hedging losses, largely incurred on hedges put in place when the fuel price was much higher than today.
There was a 2.9% increase in non-fuel costs per available tonne kilometre, including staff costs of KH$19.8 billion (S$3.58 billion), which the company said increased at a faster rate than capacity.
Cathay Pacific Chairman John Slosar said reducing manpower costs will be one of the keys to cutting losses this year.
“Our organisation will become leaner. This will improve productivity and reduce costs and will also enable us to make decisions more quickly,” said Slosar.