Above 600 Job Cuts, Is Cathay Pacific to Further Layoff Another 200 Employees?

May 26, 20178:21 am805 views

In a mass restructuring exercise and following its recent announcement this Monday to axe 600 jobs, there have been rumours of Asia’s largest airline Cathay Pacific to cut additional 200 jobs, in its means to seek profitability and overcome losses suffered by the airline in 2016.

This additional job cut of 200 employees would impact those in the junior ranks, South China Morning Post reported. These job cuts are first in the airline’s three-year revamping arrangement as announced by the carrier.

While presenting sketchy details about the overall restructuring bit and the revamp affecting workforce, the airline carrier said in a statement, the job cuts will start from the top management with key talent moves coming into effect by the middle of this year. Most of the job cuts and restructuring will be done by the end of this year.

However, a spokesperson from Cathay Pacific clearly denied the rumours of additional 200 job cuts, as quoted by the Hong Kong’s leading daily and clarified Cathay’s stand to CNBC in a news report saying, “The number of redundancies resulting from the transformation program is around 600, as we announced to our people and the public yesterday. Rumors of other figures are incorrect,”

According to a statement by Cathay Pacific, “no front-line staff or cabin crew members will be affected as a result of this change.” The company is said to be targeting 30 percent of its savings from staff cuts at the headquarters.

An official at Air China, who owns 30 percent of the Cathay Pacific was quoted saying in March by the Straits Times, “The carrier will reduce more than HK$4 billion (S$712 million) in costs over three years.”

Cathay Pacific also plans to reorganize its Cargo department as a part of wide-range transformation program, aimed at improving processes, harnessing technology and speed of decision making. The cargo department will be streamlined to eliminate the role of a Cargo Director and instead have commercial and planning functions report to the director commercial and cargo.

The management structure of the Cargo department will be overseen by the chief customer and commercial officer, whereas the services functions will report to the director service delivery.

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The company which had some 33,700 employees globally as of March said these job cuts are aimed at returning back to profitability numbers, while battling fierce competition from budget airlines and powerful emerging carriers from the Middle East and China foraying into the Asia Pacific region.

It’s not just Cathay Pacific who has been forced to rethink ways of doing business and stay profitable, also Singapore Airlines’ chief executive Goh Choon Phong announced last week at a press conference, that the airlines “transformation office” employing a full-time staff of six, will be set up in early May to review their products, services, network and deployment of their aircraft.

While details on the review process are still being worked out, Goh stressed that this move is not only about cutting costs, but also creating new revenue streams and improving upon business processes. No possible job cut indications were provided by Goh during an excerpt interview with Nikkie Asia, but he did touch upon the need for retraining and redeployment of some employees.

“We will leave no stone unturned,” Goh said. “Some of [the changes] could be radical. So be it. If it is the right thing to do, we will do it.”

Singapore Airlines has kicked off many strategic initiatives in the past six years to include fully integrating its budget subsidiaries, establishing new businesses such as joint venture airline in India and a pilot training centre. The upcoming review will be aimed at bringing out the best by harnessing all these potential initiatives.

The company also announced on May 19, that it will bring cargo company SIA Cargo back into the fold as a division of Singapore Airlines to achieve better synergy.

Also read: En Route to Transformation into a Digital Airline: Exclusive Q&A with Faz Kamaruddin at AirAsia

Image credit: cathaypacific.com

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