30th Nov 2005 10:00
British Airways PLC30 November 2005 MANAGEMENT RE-STRUCTURE ANNOUNCED British Airways today announced plans to re-structure its business with a 35 percent reduction in the number of its 1,715 managers by March 2008. The figure comprises a 50 per cent reduction in senior managers, from 414 jobsto 207, and a proposed 30 per cent reduction in middle managers from 1,301 jobsto 911 jobs. This brings the total number of job cuts to 597. Willie Walsh, chief executive, said: "I said when we reported our second quarterfinancial results last month that our costs were up in most areas and that, as aresult, we need to re-energise our efforts to deliver a competitive cost base. "We must lower our costs so that we can fund future investment in our business.Today marks the start of a renewed effort to deliver our goal of a 10 per centoperating margin. I am confident that these measures, however difficult, willhelp to build a robust British Airways and one that will benefit from sustainedprofitability. This action will enable us to carry out the investment we needto make in our business in the coming years in order to deliver a morecompetitive and efficient airline." The proposed management job cuts are set to save the airline £50 million as partof its drive to achieve a £300 million cost reduction programme by March 2007,announced in January 2004. The company plans to carry out the reduction in the number of senior managers inthree phases. Phase one will see 94 of the top executives (23 per cent) leavethe business by March 31, 2006. Further reductions will continue during the next two years with the 50 per centtarget achieved by March 2008. Full proposals and a timetable for achieving the planned 30 per cent reductionin middle managers will be developed and communicated by March 2006. Mr Walsh added: "We are re-structuring the airline to remove duplication,simplify our core business and provide clearer accountability. Managers willhave greater accountability for making decisions, delivering results and leadingthe business. "The decision to embark on a major reduction in management numbers is not one Ihave taken lightly. We have extremely talented managers and they have led theway in transforming our company during the last four years since the tragicevents of 9/11. "But it is essential that we streamline our business further and I believe it isright that we have started by looking closely at the number of senior managerswe need to deliver a sustainable, profitable future." Ends 30 November, 2005 134/AP/05 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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