BA cuts management in cost-reduction drive

updated 8:35 a.m. ET Nov. 30, 2005

LONDON - British Airways PLC will cut its management force by 35 percent, or about 600 jobs, by 2008 in a cost-reduction drive, the airline said Wednesday.

The proposed management cuts will save the airline $86 million (50 million pounds) as part of an effort to trim costs by $514 million (300 million pounds), the carrier said.

The company plans to shed half its senior managers, from 414 jobs to 207, and cut the number of middle managers from 1,301 to 911.

“We must lower our costs so that we can fund future investment in our business,” said Willie Walsh, the airline’s chief executive. “Wednesday marks the start of a renewed effort to deliver our goal of a 10 percent operating margin.”

The company envisions that 94 top executives would leave by March 31, with further cuts in the following two years.

“We are restructuring the airline to remove duplication, simplify our core business and provide clearer accountability. Managers will have greater accountability for making decisions, delivering results and leading the business,” Walsh said.

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