Cathay Pacific to cut thousands of jobs and eliminate Cathay Dragon airline as Covid-19 weighs on travel #Breaking112
The cuts will affect 5,300 employees in Hong Kong, where the company is based. Some 600 workers outside of the Asian financial hub will also be affected, Cathay said in a statement.
The company also plans to eliminate additional jobs that remained unfilled, either through a recruitment freeze or natural attrition. All told, Cathay is reducing about 8,500 jobs across the company, accounting for about 24% of its headcount.
“We have taken every possible action to avoid job losses up to this point,” said Cathay Pacific Group CEO Augustus Tang in a statement. He said the airline has scaled back capacity, deferred new aircraft deliveries, frozen recruitment and cut executive pay, among other measures.
Even so, Tang said the company continues to burn as much as 2 billion Hong Kong dollars ($258 million) per month. Wednesday’s changes will reduce the company’s cash burn by about 500 million Hong Kong dollars ($65 million) per month, he added.
Cathay Pacific stock jumped 4% Wednesday in Hong Kong after the news.
A lack of consumer confidence, the drop in business travel, and fresh coronavirus spikes in the United States, Europe and elsewhere continue to weigh heavily on global air travel.
— Sherisse Pham contributed to this report.