Some 1,250 Qantas Maintenance Engineers May Lose Jobs

The unexpected gains in Australia's unemployment rate in April may once again be placed in peril with threats of job cuts in several companies.

Leading the threat is Qantas which reports said will announce the axing of up to 1,250 aircraft maintenance engineers as part of the restructuring of the flag carrier.

Under the restructuring, Qantas will rationalise its three heavy-maintenance bases at the Melbourne and Avalon airports in Victoria and in Brisbane, and introduce streamlined maintenance practices.

The plan led the Australian Licenced Aircraft Engineers Association to write to the Civil Aviation Safety Authority on Wednesday to complain that Qantas did not follow the firm's safety-management procedures in coming up with the changes.

Steve Purvinas, federal secretary of the union, said Qantas made a safety-based decision from a directive from the board to save about $100 million a year.

A similar $100 million savings is being targeted by Murray Goulburn Cooperative which announced on Monday that it would axe 301 jobs at its head office and processing sites.

Besides cutting cost, the move would improve its manufacturing efficiencies, cut head office costs and improve MG's global competitiveness and bring higher farmgate prices.

The 301 posts affected in the cuts by the dairy firm include 168 redundancies at its processing sites and distribution centres and 59 in the head office. Those who will lose their jobs will be provided counseling and job transitioning services, while full entitlements will be paid for those declared redundant.

The cut made by Murray Goulburn is equivalent to 12 per cent of its work force. Besides Murray, Optus announced plans to shed 750 jobs and Toyota 350, while the National Australia Bank (NAB) had axed 1,250 jobs in recent months.

NAB Chief Executive Officer Cameron Clyne said that despite the job cuts it failed to prevent a 15.5 per cent decline in net profits for the first half of the year.

Randy Slechta, chief executive officer of the Leadership Management International Group (LMI), a global training organization, pointed out that cutting payroll also reduces performance since the remaining workers struggle to cope with more workload.

He said engaged employees are one of the best methods to create customer intimacy and loyalty, but disengaged employees cut customer loyalty by 14 per cent and drive customers away. Engaged employees boost customer loyalty by 71 per cent which could spell the difference between survival and closure for a company.

The bases of Mr Slechta's data are studies including the recent IBM CEO survey and LMI's yearly LEAP survey.

Australia last week registered an unexpected 4.9 per cent unemployment rate which was smaller than analysts' expectation of 5.3 per cent joblessness rate. These gains, which Treasurer Wayne Swan said is an indicator of the resilience of the Australian economy, may be negated if the more job cuts would take place among Aussie firms.