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Cathay Pacific layoffs | Cuts 8,500 people, 5,300 employees in Hong Kong Cathay Dragon suspends operations

2020-10-21T00:42:57.021Z


Earlier news reported that Cathay Pacific (0293)'s subsidiary Cathay Pacific and Cathay Dragon had decided to abandon the application for the second round of employment protection plan. The industry and the outside world believe that it is paving the way for layoffs. The plan was revealed this morning, the company


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Written by: Zhai Ziqian and Kwong Yueting

2020-10-21 08:25

Last update date: 2020-10-21 08:35

Earlier news reported that Cathay Pacific (0293)'s subsidiary Cathay Pacific and Cathay Dragon had decided to abandon the application for the second round of employment protection plan. The industry and the outside world believe that it is paving the way for layoffs.

The plan was announced this morning. The company announced a restructuring plan. The entire group will cut about 8,500 positions, equivalent to about 24% of the total number of positions in the group. At the same time, Cathay Dragon will stop operating.

Restructuring costs involved 2.2 billion yuan

According to the group, through the freezing of recruitment and the loss of natural staff, the actual reduction of employees has been reduced to about 5,900 (about 17% of the total number of positions in the group), including about 5,300 employees in Hong Kong and about 600 non-Hong Kong employees. Employees may also be affected, but this depends on the regulatory requirements of the relevant region.

In addition, Cathay Dragon, a wholly-owned regional airline of the group, will cease operations immediately.

The group intends to seek regulatory approval for Cathay Pacific and its wholly-owned subsidiary, Hong Kong Express, to operate most of Cathay Dragon’s routes.

According to the management, the cost of restructuring is about 2.2 billion yuan, which will be funded by the company's internal resources. After the reorganization, cash consumption will be reduced by about 500 million yuan per month.

The group stated that it will continue to implement the current salary reduction arrangements for senior management throughout the next year, and launch the third round of voluntary special leave plans for non-crew staff in the first half of next year; all employees will not receive a salary increase in 2021, and There will be no discretionary year-end bonus for 2020.

It is rumored that Cathay Pacific layoffs front-line flight attendants: basic salary reduced to 7000 yuan, colleagues change from perplexity to find a way out

In recent months, it has been repeatedly reported that the layoff plan has been suspended recently

In fact, Cathay Pacific has issued an internal notice to its employees earlier. From October 1st, the adjustment arrangements between employees who need to fly and take leave will be suspended immediately until further notice, while other applications for adjustment will continue to be based on the original There are guidelines to proceed.

In the past, many employees were able to obtain more flying hours to earn extra income through the transfer of leave between colleagues, or to reduce working hours in exchange for vacation.

Therefore, when Cathay Pacific employees learned of the above news, it was already the first step in arranging layoffs.

Regarding the layoff messages that have not been verified by the management, apart from mentioning the layoffs of 700 pilots, 400 Cathay City employees, and 1,500 flight attendants, it also pointed out that Cathay Pacific plans to reserve all meeting rooms in Cathay City for flight attendants. If the uniform is returned, the employee ID and email will be blocked on the same day.

Zhuang Tailiang felt that Cathay Pacific could launch destinationless flights to generate revenue, and use airport VIP lounges, first-class and business class experiences as gimmicks to attract customers.

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Zhuang Tailiang: layoffs have no major impact on the unemployment rate in Hong Kong

Zhuang Tailiang, executive director of the Liu Zuode Institute of Global Economics and Finance of CUHK, said that many industries have also been hit by the epidemic like the aviation industry. Take the hotel industry as an example. Some hotels rent out rooms on a monthly basis, and they also launched "staycation". Vacation)” discounts attract customers, and the occupancy rate is as high as 80%. Therefore, Cathay Pacific should first try to open source, including the launch of destinationless flights and the sale of air promissory tickets, so that guests can buy tickets 2 years in advance. If the open source is not successful, then Consider layoffs.

Zhuang Tailiang believes that Cathay Pacific's layoffs will not have much impact on the unemployment rate in Hong Kong. Based on the rough calculation of the local labor force of 3.54 million in the first half of the year, assuming Cathay Pacific layoffs 3,000 jobs, it will probably only increase the unemployment rate by 0.1%.

He suggested that the laid-off employees "be the first to stay if you have a company," and that the experience in the aviation industry can be applied to work in hotels, travel agencies or tourism information platforms, and stewardesses can go to high-end restaurants to serve as waiters.

Cathay Pacific layoffs

Source: hk1

All news articles on 2020-10-21

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