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Cathay Pacific takes a HK$300m hit in redundancy payouts for 600 staff

06/20/2017| 5:06:18 PM|

Cathay Pacific Airways will take a one-off hit of HK$300 million in redundancy payments as it sacks hundreds of employees in a major restructuring and cost-cutting exercise to reverse losses.

Hong Kong’s flagship airline disclosed the huge bill at a meeting last Friday with analysts from financial institutions and research firms.

Six hundred people have been laid off since last month, part of a three-year transformation of the business after the company lost HK$575 million last year.

In late May, 190 managerial and 400 non-managerial and junior ranking jobs were scrapped as part of the cost review. Staff were let go with a redundancy package of 12 months’ salary and extended medical and travel benefits.

Airline executives said the cost, part of the biggest shake-up of jobs in 20 years at the airline, would be HK$300 million, according to analysts from Bank of Communications and Jefferies.

Jefferies analyst Andrew Lee forecast the airline would save HK$500 million by 2018.

It was revealed recently that Cathay Pacific would target HK$4 billion in savings over three years, including HK$2 billion this year. The carrier has never confirmed such a figure existed.

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TAGS: Cathay Pacific | Hong Kong
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