BA cuts staffing costs during turbulent times

first_imgBritish Airways is in the process of reducing its workforce by almost aquarter following the economic downturn and the events of 11 September. MervynWalker, BA’s director for people, explains how HR is playing a key role inhelping the airline streamline the business Q How many jobs will be lost as a result of 11 September? A We have faced tough market conditions. An economic downturn, thefoot and mouth crisis, and an increasingly competitive market were allaffecting our business performance. Then the terrorists struck on 11 September.As a result of these combined pressures, we plan to reduce employee numbers by13,000, taking our workforce from 56,700 to 43,700 – a 23 per cent cut. Within days of 11 September, we instigated a series of emergency measuresbased on our best assessment of the short-term situation. On 20 September, weannounced the grounding of aircraft to cut capacity. This cut drove acorresponding need to reduce our headcount by 7,200. This was followed by a wide-ranging analysis of the business to address theunderlying problems facing the airline. In February 2002, we announced the conclusion of the three-month review.This included a further reduction in manpower of 5,800 over the next two years.With the help of our employees and the trade unions, we have alreadyachieved 6,700 cuts towards the 13,000 target. Q How has HR dealt with job losses and staffing changes? A We have a tradition of achieving our manpower reductions usingvoluntary means, avoiding compulsory redundancies wherever possible and we wereclear from the outset that we wanted to maintain that approach. Ensuring transparency across all areas has also been important. Linemanagers responsible for people issues came together with the HR team to reviewand discuss the departmental targets on a weekly basis and ensured a consistentand clear approach to headcount reduction. This has been invaluable in securing the support and acceptance of ouremployees and the unions. Q What have been the main challenges facing HR during this process? A When faced with a revenue crisis, cash is king and the normalchallenges of headcount reduction are magnified. The more traditional methodsof reducing headcount were not an option, so to achieve the 7,200 targetannounced in September, we had to keep costs to a minimum to preserve cash inthe business. We released all but a small number of sub-contractors and we stopped allnon-essential overtime. This cut manpower by 2,000 within six weeks. The HR team then set about devising an innovative range of schemes thatwould achieve our remaining target without draining money from the corporatecash reserves. The commercial environment has now improved, although traffic remainsdepressed. However, this improvement in trading conditions has meant we havebeen able to make some provision for restructuring costs, giving us greaterflexibility to use voluntary severance and early retirement. We will alsocontinue to offer the voluntary options we have used so far. Q How have changes been communicated to staff? A Communication has been essential. From the outset, we havecommunicated decisions quickly and honestly, providing financial and revenuedata to help people understand the gravity of the situation. A high prioritywas placed on the importance of face-to-face communication. Special weeklymeetings, hosted by the chief executive, were arranged for our top 300 managersand with our trade unions. Directors held regular workplace visits andmanagers’ briefing packs were provided on a weekly basis to support teambriefings. Q How has the company tried to support those who lost their jobs? A We have a robust structure of support services including a careeradvisory service, training support and confidential telephone lines. Over thecoming months, we are hosting a series of job fairs for employees who haveopted to leave, involving a broad spectrum of reputable companies. Q What impact will BA’s Future Size and Shape review, announced inFebruary, have? A The objective of the Future Size and Shape review is to transformBA into a simpler, leaner and more focused airline that is better able tothrive and prosper in an increasingly competitive market. A major part of thatis a permanent reduction in our employee costs. Our ability to secure a profitable and successful future for the airline isdependent on us delivering the targets set by the Future Size and Shape review.This is the priority for the whole airline for the coming months. Related posts:No related photos. Previous Article Next Article BA cuts staffing costs during turbulent timesOn 16 Apr 2002 in Personnel Today Comments are closed. last_img read more