JAL mulls cutting 5,000 jobs to save costs

JAL mulls cutting 5,000 jobs to save costs

Tokyo: Cash-strapped Japan Airlines is considering slashing about 5,000 employees or 10% of its group workforce by March 2012 to reduce costs by $1.6 billion, the Japanese media reported on Tuesday.

Japan Airlines Corp. is considering cutting about 5,000 employees in three years to March 2012 through attrition and other steps such as encouraging early retirement, Kyodo news agency quoted industry sources as saying.

The move would help the airline, which has been restructuring under state supervision, to reduce costs by more than 150 billion yen ($1.6 billion), the report quoted sources as saying.

The airline has begun consultations with lenders on its personnel reduction plan with a view to securing additional funding from them by indicating it will implement large-scale corporate downsizing, the sources said.

The plan, however, is expected to meet objections from groups such as labour unions, the report said.

The JAL group had about 48,900 employees as of April. In addition to attrition and early retirement, JAL plans to encourage the use of its leave of absence system in which employees can temporarily take time away from work without pay for purposes such as studying abroad, the sources said.

The JAL group incurred a larger-than-expected 99.04 billion yen net loss for the April-June quarter as cost- cutting efforts failed to compensate for travel demand hit by the global economic downturn and the outbreak of swine flu scare.