Walsh to cut 600 management jobs at BA
Former Aer Lingus chief executive Willie Walsh is preparing to lay off nearly 600 managers’ jobs in the next two years in his new job as the head of British Airways.
Mr Walsh is planning to get rid of one-third of the airline's managers before March 2008 in an effort to reduce costs by £50m (€73.2m) annually.
In what the airline described as a restructuring of its business, the number of senior managers will be reduced by half – from 414 to 207. There will also be a 30% reduction in the number of middle managers – from 1,301 to 911.
The reductions – totalling 597 – will be made by March 2008, the month that BA moves into Heathrow's new Terminal 5.
Mr Walsh presided over a similar cost-cutting venture that saw Aer Lingus shed 2,000 jobs in 2002.
He said today: "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% operating margin.”
He went on: “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 job cuts are set to save the airline £50m (€73.2m) as part of its drive to achieve a £300m (€439m) cost reduction programme by March 2007 – a target announced in January last year.
BA said it planned to carry out the reduction in the number of senior managers in three phases.
Phase one will see 94 of the top executives leave the business by March 31 next year.
Further reductions will continue during the next two years with the 50% target achieved by March 2008.
Full proposals and a timetable for achieving the planned 30% reduction in middle managers will be developed and communicated by next March.
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.
“The decision to embark on a major reduction in management numbers is not one I have taken lightly. We have extremely talented managers and they have led the way in transforming our company during the last four years since the tragic events of September 11.
“But it is essential that we streamline our business further and I believe it is right that we have started by looking closely at the number of senior managers we need to deliver a sustainable, profitable future.”
