Cebu Pacific to lay off 800 employees

Cebu Pacific is reducing its workforce as the budget carrier continues to bear the brunt of the COVID-19 pandemic in the aviation sector.

“Over the past several weeks, CEB has had to review and redefine its long-term plans around the changing needs of customers, employees and the travel industry as a whole,” Cebu Pacific said in a statement.

“It was clear after this process that CEB was too big for the operational requirements and expected new norms in the industry,” it added.

Cebu Pacific last month announced it is conducting a review of its operations to look into possible retrenchments.

Following its review, Cebu Pacific said it is “constrained to retrench more than 800 employees by August 2020.”

“This is a difficult but necessary decision for CEB in order to fulfill its long-term commitment to provide affordable and accessible air transport services to the public,” the carrier said.

“Rest assured that this process was undertaken with utmost transparency, sensitivity and responsibility to all CEB stakeholders.”

This is the second wave of workforce reduction by the carrier after it let go of its 150 newly-hired flight attendants. 

In June, 1Aviation — the ground handling firm that serves Cebu Pacific flights — said it will let go of another 1,000 employees as the industry struggles to bounce back from the impact of COVID-19. This is on top of the 400 retrenched in April.

“The COVID-19 pandemic continues to negatively impact the global airline industry and it is expected that recovery will take a long time. Since the onset of the pandemic, Cebu Pacific has responded with several initiatives to ensure the long-term sustainability of the airline and keep flying passengers in the future,” Cebu Pacific said.

The budget carrier said it is providing a retrenchment package that is “above and beyond” what is prescribed under Philippine labor laws.

The package includes:

• One-month basic salary for every year of service, tax free
• Gratuity Pay equivalent to one-month basic salary, tax free
• Health (HMO) Coverage for the rest of the year
• Pro-rated 13th Month Pay and conversion of unused leaves
• Two Round-Trip tickets to any destination

“After flying only cargo and sweeper flights, CEB restarted commercial operations on June 2, 2020. While operations continue to resume, the current number of flights account for less than 10% of the pre-quarantine network,” the carrier said.

“When it was clear that the rebuilding of the network and operational restart was slower than expected, tenured employees were given the option to voluntarily separate from the company,” it said.

Cebu Pacific said it took immediate steps to manage financial resources.

“Projects that are not critical to improving operational efficiency or passenger experience were deferred,” it said.

“Pay cuts were implemented on Management to help augment salaries and allowances for other employees. New hires, promotions and salary adjustments were suspended. Across the entire organization, work schedules were reduced,” it added. —KBK, GMA News