Cathay Pacific announces rare shake-up, 600 layoffs at head office

VICTORIA, Hong Kong - Having recorded its first annual net loss in eight years in March, Hong Kong's flagship airline Cathay Pacific has announced its biggest shake-up in two decades.

The airline has said that it will be laying off 600 employees in its head office, as competition from mainland Chinese rivals continues to rise and as number of premium class passengers continues to drop. 

The airline, in a bid to bolster its bottom line, has said that it will slash costs by 30 percent.

The carrier has also announced 600 job cuts across senior, middle management and non-managerial roles at its Hong Kong headquarters.

The company said that about 190 management roles, along with 400 non-managerial positions, representing 25 percent of management and 18 percent of non-managerial positions respectively will be slashed.

In a statement, Rupert Hogg, chief executive at Cathay Pacific, said, “We greatly appreciate and respect our people’s dedication, hard work and achievements. 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 added, "Our immediate priority is to support our colleagues affected by today’s announcement, and I’d like to thank them for all they’ve done for Cathay Pacific. 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.”

According to the airline, the employees whose positions will be made redundant in the structural shake-up will receive "a severance package including up to 12 months' salary, extended medical benefits including counselling and support, and additional and extended travel benefits.”

Further, the airline has announced a restructuring of its cargo department and it will remove the role of cargo director.

Following the change, its commercial and planning functions will report into the director commercial and cargo.