Hong Kong's Cathay Pacific to cut jobs as part of review

SYDNEY - Hong Kong's flag carrier Cathay Pacific Airways will cut jobs and consider shifting some flights to its short-haul arm after completing the biggest review of its business in two decades, it said on Wednesday.

The company laid out the results of the review in a document seen by Reuters that was e-mailed to its 33,700 employees on Wednesday after 350 managers were briefed in an internal meeting.

Cathay had said it would review of its business after it scrapped its second-half profit forecast in October.

"We aim to build a faster, leaner and simpler organisational structure ... There will be a big change in the way we do things across the company," it said in the document.

"In terms of specific job functions, some jobs will no longer be needed, some will be redefined, while other new jobs will need to be created," it said, without specifying how many staff it planned to lay off.

It said it would reorganise into seven portfolios: customer, operational, commercial, people, cargo, finance and strategy, and IT, with a plan to implement major changes by mid-2017.

It is also looking into the feasibility of its shorter-haul unit Cathay Dragon taking over a small number of Cathay Pacific's other regional services, although no firm decision has been taken.

It did not expect the structural changes to have a direct impact on its cabin crew team.

Shares in Cathay have risen 2.6 percent since Reuters reported on Monday that the completion of the strategic review was imminent. They closed 2 percent lower on Wednesday, after no announcement was made during trading hours.

The 71-year-old Hong Kong airline is under pressure to combat aggressive state-supported mainland carriers, and to position itself against an "open skies" deal signed last month between China and Australia.

Cathay's share price has tumbled to its lowest level since the depths of the global financial crisis in 2009, and none of the 18 analysts polled by Thomson Reuters have a "buy"recommendation on the stock.

Cathay said that as part of the plan its flight operations unit would undertake a review of its current structure to ensure it had the right model in place, something it said had not been looked at for many years.

It also addressed concerns that the strategy and reorganisation was part of a plan to get the airline ready for sale to Air China , China's flag carrier which already owns a 29.99 percent stake. Cathay's majority owner is Swire Pacific Ltd.

"The Cathay Pacific Group will continue to operate under its current shareholding structure, with Swire continuing to provide management services," it said.

Companies that have cut down their workforce in 2016

  • Tripda

    Rocket Internet's carpooling app, Tripda announced earlier this month that they would be organising a global shutdown of the platform.

  • Autodesk

    Autodesk a design-focused software announced early month that they will be laying off 925 positions, around 10 per cent of their entire workforce.

  • Yahoo

    Recently tech giant Yahoo confirmed that would be shedding 15 per cent of their entire workforce, and its also exploring other "strategic alternatives".

  • Yahoo

    Employees in Yahoo's Singapore office were notified of the layoffs on Feb 18.

  • Rakuten

    e-commerce platform Rakuten announced in Feb 2016 that they would be shutting down all their operations in Malaysia, Singapore and Indonesia.

  • Rakuten

    The platform probably faced a significant number of challenges in Malaysia, and they will be withdrawing to focus their efforts in countries like Japan and Taiwan.

  • Bombardier

    Bombardier will be cutting their workforce by about 7000 over the next two years.

  • Bombardier

    They will be cutting 580 jobs from their Belfast operation this year and potentially another 500 the following year.

  • Shell

    Multinational oil and gas company, Royal Dutch Shell operates in more than 70 countries and employ more than 94,000 people worldwide.

  • Shell

    Given the fact that oil prices have dropped by almost 70 per cent in less than two years, the company has already started cutting 10,000 jobs to try and recover from all their losses.

  • Devon Energy

    Devon Energy, a US oil producer, mentioned that 700 people would lose their jobs by the end of the Feb 18, 2016, and this is all in response to the current commodity price environment.

  • Top Glove

    Malaysian company Top Glove is currently the world's largest maker of natural rubber gloves with operations in 27 countries. The company announced that they would cut their foreign labour by 5 per cent due to rising costs and increasing automation.

  • Barclays

    Some 100 Barclays employees in Singapore were axed on Jan 21 in a drastic cost-cutting exercise which saw the bank exit multiple businesses across Asia.

  • Standard Chartered

    Global bank Standard Chartered had laid off a number of people in Singapore late last year as it axed 15,000 jobs globally.

  • Standard Chartered

    Its previous workforce globally was at 86,000, and currently employs about 7,000 staff in Singapore.

  • HSBC

    HSBC has announced that they will be freezing salaries and freezing hiring in 2016 globally in the battle to cut costs, affecting 3,000 Singapore employees.

  • Resorts World Sentosa

    According to a report on Straits Times, more than 30 employees at Resorts World Sentosa (RWS) have been laid off earlier in February.

  • Resorts World Sentosa

    However, the lay offs was due to overstaffing and it is not an isolated case. There are currently about 12,000 people working at Resorts World Sentosa.

  • Maersk

    Maersk Line, one of the world's top container shipping companies, recently merged its Singapore and Hong Kong regional offices. Last November, it also shared new plans to reduce its network capacity and announced that it will be cutting 4,000 jobs.

  • STMicroelectronics

    STMicroelectronics will cut about 1,400 jobs and close its loss-making set-top box business, including 670 in Asia.

  • Goldman Sachs

    Goldman Sachs has been reducing the size of its investment-banking team in Singapore by about 30 per cent compared with the start of last year, according to a report from Bloomberg.

  • Credit Suisse

    Credit Suisse announced 4,000 job cuts globally, although no layoffs are expected in the Asia-Pacific region yet.

  • Royal Bank of Scotland

    Royal Bank of Scotland has also announced that they could be cutting as many as 80 per cent of the jobs in its investment banking unit over the next 4 years, and last year laid off "hundreds" in Singapore.