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