After weeks of anticipation, Cathay Pacific today (22 May) announced that it will lay off around 600 people in its head office as it faces rising competition from rival carriers and tough business conditions.
This is part of a "transformation programme" to make Cathay Pacific and Cathay Dragon more effective by improving the speed and quality of decision-making and putting a greater focus on its customers.
The changes will affect senior, middle management and non-managerial roles at the comapny’s headquarters in Hong Kong. Around 190 management and 400 non-managerial roles will go, representing 25% of management and 18% of non-managerial positions respectively.
Cathay has declined to comment on whether the layoff would affect the marketing and PR department.
The majority of affected employees will be informed of changes or a cessation to their role today and over the next month, with most of the restructuring completed by the end of 2017.
No frontline employees, pilots or cabin crew will be affected.
Rupert Hogg, the newly-appointed CEO of 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.”
“It is the first step in the transformation of our business. 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.”
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 counselling and support, and additional and extended travel benefits.
It will also restructure its cargo department. It will streamline the structure by removing the role of cargo director.