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.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors