Cathay Pacific (CX, Hong Kong International) has announced that it is cutting 600 jobs at its Group's Hong Kong head office, following a disastrous year that saw a full-year loss of HKD575 million (USD73.9 million).

Rumours of the cuts circulated earlier this year, with a memo seen by Reuters saying that the companies - including its passenger subsidiary Cathay Dragon (Hong Kong International) - had become stagnant. "Our airlines have not seen a review of the business or restructured our teams for over 20 years. We cannot afford to stand still."

The cuts relate to office staff only, with around 90 management and 400 non-managerial roles to be slashed. Cathay says that this represents 25% of management and 18% of non-management positions.

No pilots or cabin crew will be affected, however Cathay says that frontline employees will be expected to "deliver greater efficiencies and productivity improvements, in line with the rest of the organisation."

Cathay has seen increased competition from mainland Chinese rivals over the past few years, and a decline in the demand of 'premium' products with the advance of low-cost alternatives. Cathay Pacific CEO Rupert Hogg said that it had been a tough but necessary decision.

"As we look to the future we will have a new structure that will make us leaner, faster and more responsive to our customers' needs," Hogg said. "It is the first step in the transformation of our business."

Also announced was a restructure of Cathay's cargo division, with the role of Cargo Director to be removed and consolidated under the Director of Commercial and Cargo.