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PIA finalises decision to fire half of its employees

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PIA finalises decision to fire half of its employees

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What happened:

The Pakistan International Airlines (PIA) administration has finalised the plan for the restructuring of the national airline, and under this plan half of PIA’s employees will be laid off. The airline plans to reduce its employees from the current 12, 900 to 7, 500, nearly half of its current workforce.

The restructuring plan will see PIA split its departments into core and non-core functions. Under this plan core functions will comprise of administrative departments including finance, CNC, security and human resources. While non-core functions will include engineering and kitchen etc.

PIA currently has 10, 500 regular employees, and 2, 400 employees on daily wages. Under the new restructuring plan PIA will be cutting down its workforce by half, and it in the next phase of the plan by 2021 it will reduce that number further to 6, 000 or 5, 600.

These measures are being taken by the PIA in order to reduce its costs and come close to breaking even. According to the restructuring plan reducing the number of employees is one of the most effective ways for the airline to cut costs.

The background:

According to inside sources, the PIA’s total assets are worth Rs. 107 billion while it owes Rs. 470 billion in loans. The committee implementing the restructuring plan will also consider declaring all loan amounts over and above its assets public debt.

Just last month, the government approved a plan to lay off over 3,800 regular and contractual employees of PIA to cut annual losses by Rs4.2 billion.

The Economic Coordination Committee (ECC) of the Cabinet had approved a Rs. 12.87 billion Voluntary Separation Scheme (VSS) for PIA employees, to be paid in two-and-a-half years time.

According to the Aviation Division, the laying off of 3,500 employees would result in annual savings of Rs4.2 billion and the government will recover the Rs12.9 billion VSS cost within two-and-a-half years.

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