Cathay Pacific is axing 600 jobs at its Hong Kong head office as it responds to a massive slump in annual profit that saw it make its first loss in eight years.
The changes will affect senior, middle management and non-managerial roles at the headquarters with around 190 management positions, 400 non-managerial roles to go.
Most staff will learn their fate Monday and will receive a severance package that includes up to 12 months’ pay and extended medical benefits.
The restructuring does not affect frontline employees such as pilots and cabin crew but the airline flagged these workers will be asked to “deliver greater efficiencies and productivity improvements, in line with the rest of the organisation”.
“We greatly appreciate and respect our people’s dedication, hard work and achievements, ‘’ recently installed chief executive Ruper Hogg said in a statement. “However, we have had to make tough but necessary decisions for the future of our business and our customers.
“Changes in people’s travel habits and what they expect from us, evolving competition and a challenging business outlook have created the need for significant change.”
Hogg, the airline’s former chief operating officer, was named Cathay’s new chief executive as part of sweeping management changes announced in April.
He took on the role as Cathay is reeling from increased competition from low-cost and Chinese carriers as well as a bad call on fuel hedging.
Cathay Pacific’s profit nosedived last year by almost 110 per cent to a net loss of $HK575m ($US74m) amid warnings from the Hong Kong group that it expected the environment this year to remain challenging.
It blamed the worse than expected result on “intense and increased” competition combined with economic factors such as the strength of the Hong Kong Dollar and reduced economic growth in mainland China.
Hogg said the airline needed a new structure that would make it faster and more responsive to customer needs and this was the first step in the airline’s transformation.
“We want to invest in and improve the experience that we offer people in Hong Kong and around the world, to find new ways to give our customers what they really want and need,” he said.
The airline group will also restructure its cargo operations by removing the role of cargo director and making the unit direct report to a director of commercial and cargo.
Have questions or want to share your thoughts?
