PCCW Ltd, Hong Kong's biggest phone company, has asked more than 2,000 workers to take a pay cut of as much as 20 percent as it moves them into a new network company to reduce costs.
Workers who don't accept the terms may be fired on Dec. 20, said Chan Wing Wa, the unit's managing director.
The affected workers represent about three-quarters of the 3,000 staff that PCCW plans to shift into Cascade Ltd, a new technical services unit.
The phone company, controlled by Richard Li, son of billionaire Li Ka-shing (李嘉誠), is trying to cut costs because its core fixed-line revenue is falling and it needs cash to pare US$4.2 billion in net debt.
"It's a good move to repair the company's financial position," said Ambrose Chang, who helps manage US$400 million of stock at Daiwa International Capital Management Asia.
"The company is feeding a huge workforce while facing difficulty in finding growth in its local market," Chang said.
PCCW shares fell as much as 3.7 percent. They traded at HK$1.32, down HK$0.03, or 2.2 percent, as of 12:29 p.m.
The phone company said the average salary cut will be "approximately 10 percent" and it will reimburse workers for the lost pay in the first year, with payments in January and September.
"There will be no alternative redeployment opportunities within PCCW for employees who choose not to accept the offer to join Cascade," the company said in a statement.
The plan for Cascade comes less than a month after PCCW turned 11 percent of its workers into subcontractors, reducing its workforce to 12,000 from 13,500. Unlike those workers, the staff who move to Cascade will remain part of PCCW.
The phone company has in addition fired about 1,858 employees since July 2001. Sales at its fixed-line phone business fell 9 percent in the first half of this year on increased competition and weak demand caused by Hong Kong's economic slump.
A "small number" of workers will be fired as a result of the creation of Cascade, Chan said, without elaborating.
"We won't accept any firing, and any salary cut will be opposed," said Leung Ting To, chairman of the PCCW employees' general union.
The union hasn't yet held a meeting of its members to discuss their response, he said.
PCCW expects the salary cut to reduce its own costs by 10 percent, Leung said, citing Chan.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS