British Airways is to cut about 1,000 management jobs in a move it says is aimed at reducing costs to pay shareholder dividends.
BA says it "will find additional savings of £225 million [$360 million] this year to deliver the profits that the City expects". Analysts had warned that it was on course for a £7 million operating loss.
BA says the cuts are being made to rescue dividends, but adds that jobs would have come under pressure anyway because of its plan to reduce fleet capacity to boost average yield per seat.
"A 12% reduction in capacity will obviously mean fewer people," says the airline. "We are in the middle of a complex task of working out how many people the business will need and be able to support."
BA will not confirm that the savings will be achieved through job cuts, but it is understood 1,000 jobs will go in the current financial year (ending 31 March, 2000), with middle managers bearing the brunt.
"Nobody anticipated market conditions to be this bad," says BA, adding that the recent record of annual job increases "is likely to stop". But its new strategy "will maintain the requirement for high-performing managers and the focus on premium cabins will ensure a need for the best front-line staff".
The threat of cuts has nevertheless alarmed unions: BA's pilot retirement programme will peak early in the next decade, but doubts remain over other jobs.
Source: Flight International
