Cathay Pacific layoffs | CEO Deng Jianrong: I am sorry to decide to understand the anxiety and distress of leaving colleagues

Social News

Written by: McKay

2020-10-21 09:09

Last update date: 2020-10-21 09:14

Cathay Pacific announced today (21st) morning a restructuring plan to cut 8,500 positions.

Among the 8,500 positions, about 5,300 employees in Hong Kong will be laid off in the next few weeks, and another 600 non-Hong Kong employees may be affected.

Cathay Pacific CEO Deng Jianrong sent a letter to employees stating that all feasible measures have been taken to protect the livelihoods of the largest number of employees, including reducing flights, delaying the delivery of new aircraft, suspending non-essential expenses, freezing recruitment, implementing salary cuts for senior management, and arrangements With two rounds of special vacation plans, Cathay Pacific still consumes HK$1.5 billion to HK$2 billion in cash every month, but after making many efforts, it will be unsustainable in the long run. If no further measures are taken, the group will eventually be unable to continue operations.

In his letter, he described the decision as distressing. He thanked "our outstanding employees for working together with us". He also said that he understands that every employee who is leaving the company must feel very anxious and distressed at this moment. He apologizes for this.

Cathay Pacific announced a restructuring plan on October 21, cutting 8,500 positions.

(Photo by Zhang Haowei)

Under the new crown pneumonia epidemic, the aviation industry was hit unprecedentedly and paralyzed.

Cathay Pacific received an injection of HK$27.3 billion from the government earlier, but Cathay Pacific’s financial difficulties have not improved. This morning (21st) announced a restructuring plan to cut 8,500 positions and cut about 5,300 employees in Hong Kong in the next few weeks. About 600 non-Hong Kong employees may also be affected.

Cathay Pacific’s Chief Executive Officer Deng Jianrong also sent a letter to employees this morning. He described the decision as distressing. However, all measures announced today, including layoffs, new service conditions, and the suspension of Cathay Dragon’s operations to improve efficiency, will now be monthly The cash consumption of 1.5 billion to 2 billion Hong Kong dollars decreased by about 500 million Hong Kong dollars.

The personnel department of the company will later send an email to all employees about the relevant details, notify most of the affected employees, and give all affected employees the most appropriate assistance in the resignation plan.

Deng Jianrong said in the letter: "I understand that every employee who is leaving the company must feel very anxious and distressed at this moment. I apologize for that." "We sincerely hope that the employees who are leaving will understand that the company's decision is absolutely not personal. You should all be proud of your contribution during your tenure at the group."

Cathay Pacific CEO Deng Jianrong sent a letter to employees on October 21.

(Photo by Gong Jiasheng)

Pilots and cabin attendants need to update their service conditions. All employees will not receive a salary increase in 2021

Deng Jianrong also mentioned in the letter that all measures have been taken to avoid layoffs, including reducing flights in response to demand, delaying the delivery of new aircraft, suspending non-essential expenses, freezing recruitment, implementing salary cuts for senior management, and arranging two rounds of special vacations. plan.

In order to ensure the continuity of the Group’s future operations, the company will require pilots and cabin attendants to transition to new service conditions. At the same time, it will continue to implement cash preservation measures. All employees will not receive a salary increase or receive a salary increase in 2021. A discretionary year-end bonus for 2020 will be issued; the current salary reduction arrangements for senior management will continue throughout 2021, and the third round of voluntary special vacation plans will be launched for non-crew employees in the first half of next year.

▼Full text of the letter from Deng Jianrong, CEO of Cathay Pacific Airways to employees▼

Dear colleagues:

The pandemic has swept the world and continued to deal a heavy blow to the aviation industry and our business.

As our passenger transport business completely relies on cross-border travel, the predicament we face is more severe than many other airlines in the world.

We used to carry nearly 100,000 passengers a day, but in September this year, we carried about 1,500 passengers a day.

We have taken all possible measures to avoid layoffs, including reducing flights in response to demand, delaying the delivery of new aircraft, suspending unnecessary expenses, freezing recruitment, implementing salary cuts for senior management, and arranging two rounds of special vacation plans.

We have taken all feasible measures to protect the livelihood of as many employees as possible.

The earlier recapitalization plan allowed us to continue operations.

We are grateful to the Hong Kong Special Administrative Region Government, Cathay Pacific shareholders, business partners, and most importantly, we thank our outstanding employees for working with us.

However, even with repeated efforts, Cathay Pacific still consumes 1.5 billion to 2 billion Hong Kong dollars in cash each month, which will be unsustainable in the long run.

The future prospects are still very uncertain, and the pace of market recovery will obviously be quite slow.

According to the forecast of the International Air Transport Association (IATA), air passenger traffic will not be expected to return to the level before the epidemic until 2024.

We have listened to the opinions of different employee groups, and have carefully analyzed multiple possible situations, and finally decided to adopt the most responsible plan to keep as many jobs as possible.

Despite this, the company expects that the passenger capacity in the first half of 2021 will still be much lower than 25% in 2019, and the passenger capacity for the whole of 2021 will be much lower than 50%.

However, if no further measures are taken, the group will eventually be unable to continue operations.

To protect the future, the Cathay Pacific Group must undergo a fundamental reorganization.

Only in this way can we fulfill our responsibilities to the Hong Kong aviation hub and customers, and try to retain as many jobs as possible.

To this end, we must build a business with clearer goals, higher efficiency, and stronger competitiveness.

We will concentrate on operating the two clearly positioned passenger transport brands under the Group, give full play to Cathay Pacific’s high-quality service and strong brand awareness, and then cooperate with Hong Kong Express Airways’ low-cost airline business model.

Unfortunately, this also means that we have decided to stop Cathay Dragon’s operations and deactivate its brand.

Over the past 35 years, Cathay Dragon has won a well-deserved reputation with its outstanding service and dedicated hospitality through the efforts of its excellent team.

The heaviest news today is that we want to bid farewell to the many outstanding colleagues we respect.

The entire group (including Cathay Dragon) will cut about 8,500 positions, accounting for about 24% of the group's 35,000 positions.

Through the freezing of recruitment and the loss of natural staff, the group has reduced the actual number of employees affected to approximately 5,900 (approximately 17% of the total number of positions in the group).

In other words, the group will lay off approximately 5,300 Hong Kong employees in the next few weeks, and another approximately 600 non-Hong Kong employees may also be affected.

This is a distressing decision that must be made, for which I am deeply sorry.

The personnel department of the company will send an e-mail to all employees with relevant details later.

We will inform most of the affected employees as soon as possible and with our best efforts.

The resignation plan we put forward aims to give all affected employees the most appropriate assistance. However, I understand that every employee who is about to resign must feel very anxious and distressed at this moment, and I apologize for this.

In addition to cutting jobs, we also need to increase productivity to ensure the continuity of the group's future operations.

To this end, we also require pilots and cabin attendants to transition to the new service conditions.

The new contract will continue to provide comprehensive benefits for all pilots, while allowing the company to maintain market competitiveness in the current environment.

This is also not an easy decision to make, but we must maintain the competitiveness of our business model to ensure that the group can continue to operate.

We will continue to implement cash preservation measures, and all employees will not receive a salary increase in 2021, nor will they receive discretionary year-end bonuses for 2020.

The company will continue to implement the current salary reduction arrangements for senior management throughout 2021, and launch the third round of voluntary special leave plans for non-crew staff in the first half of next year.

We are very grateful to many employees for their strong support of the first two rounds of the plan, and sincerely look forward to receiving your support again.

All the measures announced today, including layoffs, new service conditions, and the suspension of Cathay Dragon to improve efficiency, will reduce our current monthly cash consumption of 1.5 billion to 2 billion Hong Kong dollars by about 500 million Hong Kong dollars, thereby enabling us The loss of cash was reduced to a more sustainable level.

From these figures, we can see that we urgently need and absolutely must take measures of this scale today to curb the loss of cash and protect our future development.

We sincerely hope that employees who are leaving the company can understand that the company's decision has absolutely nothing to do with individuals.

You should all be proud of your contribution during your tenure in the group.

I understand that employees will feel sad and ups and downs in the next few weeks, and I sincerely apologize for that.

I assure everyone that the company will respect each other, be fair and just, and try its best to provide employees with all aspects of support in the process of layoffs.

I know this team and I am convinced that everyone will support each other.

Here, I sincerely thank you all for doing your responsibilities and doing your best to contribute to the company.

When Cathay Pacific grows up again and restarts its recruitment plan, I will be more than happy to welcome you to join the team again.

Cathay Pacific is a company with incomparable resilience and a Hong Kong brand that everyone is proud of. It is well known and respected all over the world.

Our current situation is undoubtedly very difficult, but I am full of confidence in the restructuring plan and believe that we will be able to tide over the difficulties.

We are absolutely confident in the long-term prospects of Cathay Pacific and the Hong Kong aviation hub.

I understand that everyone will be in a bad mood in the next few weeks or even months, especially since we are going to bid farewell to some of our colleagues who have made a lot of contributions to the company.

I urge everyone to take care of and help each other more at this moment.

Although this is a decision that must be made in response to the impact of the epidemic, our current priority is to support employees affected by today’s announcement.

Deng Jianrong

Cathay Pacific layoffs | Cathay Pacific announces restructuring plan to cut 8,500 jobs, Dragonair ceases operations today

Coronavirus disease.

Latest | Less than 10 preliminary diagnoses yesterday rumored Cathay Pacific layoffs

01News

Deng Jianrong Cathay Pacific Airways Cathay Pacific lays off Cathay Pacific Airways