Cathay Pacific Airways Ltd, a flag carrier of Hong Kong, announced a few days ago that it was cutting 600 jobs, its biggest layoff in nearly two decades. The company seeks to return to its prominence and profitability in an industry marked by declining ticket prices. The scissor is being moved over jobs of 18 percent of non-managerial positions and 25 percent of management staff at its head office in Hong Kong. However, the company said that cabin crews, pilots, and frontline employees will not be affected by job cuts. As of March 2017, Cathay Pacific had nearly 33,700 employees across the globe.
More Players to Jump on Bandwagon
Cathay Pacific, last year, reported its first annual loss since 2008 and is expected to write off losses this year again. The loss is mainly being attributed to the competent pricing of tickets and the increasing capacity and routes due to declining fuel prices.
This reduction in headcount is the first step in a three-year reorganization plan announced this year by the airlines. Its shares increased by two percent after the news and have climbed over 13 percent for the year to date. The layoff is anticipated to save it at least US$64 mn annually, or about six percent of total staff costs. In addition to sacking employees, it will also consider cutting down routes flown and shifting more routes to its short-haul arm. Industrial experts believe that other players in the industry will also have to take this bold step. Singapore Airlines, which has also incurred a loss in its latest quarter, announced a strategic evaluation.