Domino fears after travel firm sheds jobsTop News | Maisy Mok 1 Dec 2020
Wing On Travel is axing 120 staff - about 20 percent of its personnel - sparking concerns of further layoffs at other major travel agencies trying to survive.
Affected staff come from various departments and will be paid one month in lieu of notice, Wing On said, with remaining staff to continue with no-pay leave.
Wing On Travel said the layoffs are due to its current staff count being "far beyond" its future business needs and with labor cost bringing unbearable pressure to the company after the employment subsidy scheme ended yesterday.
The pandemic has caused a serious blow to the agency, which has seen almost zero income while bearing huge rentals, salaries and other expenses, Wing On said.
It added it had no choice but to streamline its structure and undergo reorganization to maintain its long-term operation.
Tong Kim-sang, general secretary of the Hong Kong Travel Industry (Outbound) Tour Escort and Tour Guide Union, said about 30 to 40 staff from Wing On Travel sought help from the union yesterday.
Tong also received calls for help from EGL Tours and Jetour Holiday yesterday.
Both companies have requested their staff to undertake half a year of no-pay-leave. "If they do not accept the arrangements, they would be laid off immediately," Tong said.
He estimated 700 staff from the three companies are affected by layoffs and no-pay leave.
"They asked for help in regards to whether they should sign the agreement and the calculation of the compensation," Tong said.
Ronnie Ho Pak-ting, chairman of Jetour, said only a small number of staff were affected.
Jetour still has to maintain hundreds of people handling their I-mall business, IT upgrades and preparation for business uptick in the middle of next year, he said "so we cannot reduce manpower significantly."
Perry Yiu Pak-leung, convener of Hong Kong Travel Agents' Relief Alliance, said due to the new wave of outbreaks, it is hard to tell when businesses will be restored, so the only way for travel agencies to maintain operations is to cut down expenses.
"And the only way they can cut down expenses is to cut down manpower costs. They have no other choice," Yiu said.
About HK$600 million in relief for the tourism industry - announced during the policy address - can assist small-scale travel agencies in paying rent for several months but it will not be much help for large travel agencies such as Wing On Travel, he said.
Tourism sector lawmaker Yiu Si-wing said he does not think that the travel industry will recover in the coming six months.
Yiu believes more middle to large travel agencies will also be forced to layoff workers or tell them to go on no-pay leave.
"I hope the employment subsidy scheme will be disbursed again and funds set up for industries that are in a difficult situation," he said.