Cebu Pacific to let go over 800 employees by August

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Metro Manila (CNN Philippines, July 9) – Cebu Pacific will lay off hundreds of its employees as the COVID-19 pandemic continues to wreak havoc on the aviation industry worldwide, the budget carrier announced on Thursday.

In a statement, Cebu Pacific (CEB) said it "is constrained to retrench more than 800 employees by August 2020" after weeks of reviewing and redefining long-term plans to suit the changing needs of customers, employers, and the entire travel industry.

The airline said last month it will conduct a review of long-term plans in light of expected shifts in consumer behavior and travel demand in the long run due to the pandemic.

"It was clear after this process that CEB was too big for the operational requirements and expected new norms in the industry," Cebu Pacific said, adding the decision was "difficult but necessary" in satisfying its commitment to provide the public affordable and accessible transport services.

Affected employees will be receiving a retrenchment package which includes the following:

- 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

"CEB understands the potential difficulty to find employment at this time. Together with JG Summit, CEB will assist affected employees by connecting them to opportunities across the conglomerate," said the budget carrier. "Outplacement sessions and malasakit transition programs will also be made available."

This is the second time the coronavirus crisis forced Cebu Pacific to scale down its workforce.

In mid-March, it laid off over 150 cabin crew members following travel bans to and from Metro Manila and key provinces in light of the pandemic.

Other measures enforced to cut costs

Cebu Pacific likewise stated actions it took to further trim down expenses amid the crisis.

These include the deferral of projects "not critical to improving operational efficiency or passenger experience" along with implementing pay cuts on the airline's executives for augmenting salaries and allowances for other employees.

The budget carrier also put new hires, promotions and salary adjustments on hold and reduced work schedules across the entire organization.

Cebu Pacific likewise revealed tenured employees were offered a voluntary separation, saying it was "clear" the rebuilding of its flight network and operational restart was "slower than expected."

Major airline companies in the country have resumed limited domestic flights earlier this month after the government decided to ease lockdown measures in the capital region and other areas.

Despite this, Cebu Pacific said the number of flights to date amount to less than 10 percent of its pre-quarantine network.

CNN Philippines correspondent Paolo Barcelon contributed to this report.