Cathay Pacific, Asia'ss biggest international airline, will eliminate 600 jobs, including 190 managerial positions, as part of the biggest revamp in two decades to help revive earnings.
The majority of affected employees will be informed of the changes on Monday and over the next month, with most of the restructuring completed by the end of 2017, Cathay said in a statement Monday
No frontline employees, pilots or cabin crew will be affected, it said. The group had about 33,000 people as of June 2016, according to data compiled by Bloomberg.
“We’ve had to make tough but necessary decisions for the future of our business and our customers,” Rupert Hogg, who became the chief executive officer on May 1, said in the statement.
“As we look to the future we will have a new structure that will make us leaner, faster and more responsive to our customers’ needs. It is the first step in the transformation of our business.”
Once a dominant player in Asia’s premium air travel market with few serious rivals, the city-based marquee carrier has hit turbulence, despite the booming travel demand in the region.
It is in the midst of a three-year reorganization program after reporting its first annual loss in eight years for 2016, in part from a fuel-hedging bet gone wrong.
While sharing sketchy details of its review in January, Cathay said changes “will start at the top” and it would do away with some positions as part of the reorganization, with key moves taking effect by mid-year.
The company has said it is targeting savings of about 30 percent from staff cost cuts at its headquarters. An official at Air China, which owns 30 percent of Cathay, said in March that the carrier will reduce more than HK$4 billion (US$514 million) in costs over three years.
All employees whose roles will become redundant in the new structure will receive a severance package including up to 12 months’ salary, extended medical benefits including counseling and support, and additional and extended travel benefits, Cathay said.