One-third of MAS staff will be jobless in a matter of days

Malaysia Airlines (MAS) is set to terminate at least one-third of its workforce in a matter of days as a last effort to save the flailing national carrier, The Star reported today.

The report said MAS would terminate its entire staff and re-employ two-thirds of the 20,000 workers under new conditions.

It added that Christoph Mueller, the newly hired chief executive, would be the only one spared, and that no government-linked company had ever sacked nearly everyone.

It was previously reported that some 6,000 jobs would be cut, but sources told The Star that the figure would likely be closer to 8,000 and that job cuts would be made in stages over the space of a year.

The flag carrier has suffered losses for the last three financial years and the twin tragedies of flights MH370 and MH17 last year made revival more difficult.

Given the challenging environment in the aviation sector, MAS had previously warned that its weak financial performance was likely to continue.

The Star said that executive chairman of consulting and audit firm PricewaterhouseCoopers Datuk Mohammad Faiz Azmi would be appointed to sign the termination letters, which will be sent out on Wednesday.

On August 30 last year, Khazanah Nasional Bhd, MAS's sole shareholder, unveiled a radical plan to revive MAS that called for job cuts, a capital injection of up to RM6 billion and the creation of a new company to carry out the airline business.

MAS Bhd (MAB) is expected to commence operations on September 1.

Faiz Azmi, who was designated administrator for MAS effective May 25, is responsible for facilitating the transfer of selected assets and liabilities from MAS to MAB by September 1.

Meanwhile, Khazanah said in a statement today that MAS would continue to operate until August 31, after which MAB would take over business operations.

Under the restructuring plan, two letters will be given out: the termination letter and an offer to join MAB or an invitation to report to the Corporate Development Centre (CDC), where exiting MAS employees will have access to re-skilling training and placement services.

It was also reported that Mueller was looking at a tough business plan for the new airline with even the 3,799 supply contracts being reviewed.

The Star said those terminated would receive compensation but added that the amount might not be what was stipulated under the collective agreement.

Those rehired will also be given a sign-on bonus, it said.

MAS reportedly completed a comprehensive talent assessment in February this year, which saw its top 500 senior executives undergo a three-hour behavioural interview with an independent consultant.

In April, The Malaysian Insider reported that Khazanah would not bow to pressure from workers' unions to scrap its restructuring plans.

On March 20 this year, Khazanah announced that MAS would issue employment termination letters with three months’ notice to all its employees on June 1, instead of the earlier scheduled date of April 1.

MAB will also issue employment offer letters to selected MAS employees on the same date.