British Airways is re-structuring its business with a 35 per cent 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 jobs to 207, and a proposed 30 per cent reduction in middle managers from 1,301 jobs to 911 jobs. This brings the total number of job cuts to 597.
Willie Walsh, chief executive, said: “I said when we reported our second quarter financial results last month that our costs were up in most areas and that, as a result, 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 cent operating margin. I am confident that these measures, however difficult, will help to build a robust British Airways and one that will benefit from sustained profitability. This action will enable us to carry out the investment we need to make in our business in the coming years in order to deliver a more competitive and efficient airline.”
The proposed management job cuts are set to save the airline £50 million as part of 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 in three phases. Phase one will see 94 of the top executives (23 per cent) leave the business by March 31, 2006.
Further reductions will continue during the next two years with the 50 per cent target achieved by March 2008.
Full proposals and a timetable for achieving the planned 30 per cent reduction in 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 will have greater accountability for making decisions, delivering results and leading the business.”