Philippine Airlines Lays Off 2,600 Personnel To Cut Costs As Airline Deficits Mount

The Philippine Labor Department approved on Friday the mass lay-off of 2,600 employees of Philippine Airlines. The affected workers are those in PAL’s in-flight catering, airport services and call center reservations, whose jobs would be outsourced by the flag carrier to cut costs.

Labor Secretary Rosalinda Baldoz declared the lay-offs as lawful because of PAL’s cost-cutting program.

But Baldoz required PAL to provided affected employees with transition guarantees and benefits.

PAL claimed it lost $312 million (13.35 billion pesos) in the last few years due to the slump in the global aviation industry caused by the financial crisis, higher fuel costs and downgrade of the air carrier’s safety rating to category 2.

The PAL labor union protested the DOLE decision, claiming the mass lay-off is illegal and amounts to union busting.

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