HONG KONG (REUTERS, BLOOMBERG) - Hong Kong's flagship carrier Cathay Pacific Airways Ltd said on Monday (May 22) it will cut around 600 staff, including 190 management jobs and 400 non-management staff by mid-June.
Cathay Pacific said no frontline employees, pilots or cabin crew would be affected by the announcement.
In March, Cathay Pacific had said in an internal memo that it plans to cut the cost of middle and senior management roles at its Hong Kong head office by 30 per cent.
The memo came a day after the airline reported its first annual loss since 2008.
The majority of affected employees will be informed of the changes on Monday and over the next month, with most of the restructuring completed by the end of 2017, Cathay said in a statement on Monday.
The group had about 33,000 people as of June 2016, according to data compiled by Bloomberg.
"We've had to make tough but necessary decisions for the future of our business and our customers," Mr Rupert Hogg, who became the chief executive officer on May 1, said in the statement.
"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."
Once a dominant player in Asia's premium air travel market with few serious rivals, the city-based marquee carrier has hit turbulence, despite the booming travel demand in the region. It is in the midst of a three-year reorganisation programme after reporting its first annual loss in eight years for 2016, in part from a fuel-hedging bet gone wrong.
While sharing sketchy details of its review in January, Cathay said changes "will start at the top" and it would do away with some positions as part of the reorganisation, with key moves taking effect by mid-year.
The company has said it is targeting savings of about 30 per cent from staff cost cuts at its headquarters. An official at Air China Ltd, which owns 30 per cent of Cathay, said in March that the carrier will reduce more than HK$4 billion (S$711 million) in costs over three years.
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 counseling and support, and additional and extended travel benefits, Cathay said.
Shares of the airline have gained 11 per cent this year, compared with a 13 per cent advance in the Bloomberg Asia Pacific Airlines Index.