Cathay layoffs likely to result in ripple effect

Local | 22 Oct 2020 2:46 pm

The aviation industry may face more layoffs after Cathay’s massive cut in staff, involving more than 30 to 40 percent of practitioners in the industry being dismissed, said Senior Lecturer of CUHK Business School Simon Lee Siu-po.

Lee pointed out that given large enterprises like Cathay Pacific still decided to layoff its employees after being injected billions by the government, other small and medium enterprises would likely follow suit.

“Authorities should introduce more aid under the Employment Support Scheme, subsidize staff salaries between December and February for corporates, to prevent the unemployment rate worsening from more layoffs,” Lee suggested.

The head of the Staff and Workers Union of Hong Kong Civil Airlines, Li Wing-foo also worried that the closing down of Cathay Dragon would lead to another wave of massive layoffs.

“There is one catering business where 60 percent of their orders were from Cathay Dragon, now with the airline closed, I am worried they will also be forced to cut expenses,” Li stressed.

He also mentioned that there are three other companies responsible for maintenance and cabin cleaning of the airline’s aircraft, worrying they will also be put under pressure.

Sources say with the massive Cathay layoffs, Hong Kong’s unemployment rate will further increase by another 0.1 percent, reaching 7 percent in the fourth quarter of 2020.

Worldwide Consulting Group managing director Armstrong Lee Hon-cheung said the Cathay staff who were dismissed will find it hard to get a new job with their skillsets.

“Those flight attendants and ground crew staff are all frontline staff serving customers, industries requiring such skillsets like the hospitality industry and retail industry are also hanging on for dear life, not needing any extra employees,” he said.

He also worried that employers will see this as an opportunity to lower wages for recruiting new staff, with a large number of unemployed in the market.

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