British Airways' Staff Agree to Work for Free

Posted by: Kerry Capell on June 26

Would you accept a pay cut, or even work for free to save your job? On June 26, British Airways announced that some 17% of its 40,000 strong workforce did. Just under 7,000 of British Airways’ staff accepted pay cuts, including 800 of whom followed the lead of CEO Willie Walsh and agreed to work for free for a month.

BA says the moves will save the troubled airline up to $16.5 million. Walsh, who will be forgoing his own salary in July, described his employees offers somewhat patronizingly considering his own $1.2 million salary last year as a “fantastic first response.”

That implies Walsh is hoping for more, something union leaders say is unrealistic. Britian’s biggest union Unite claims employees were bullied into accepting the cuts through “intimidating e-mails from senior managers.”

Having racked up $662 million in losses in the year through March, the biggest in 25 years, BA needed to do something fast. But the savings from these latest moves are just miniscule compared with the carrier’s deteriorating financial position.

Walsh argues that moves are necessary to avoid redundancies. But by resporting to such drastic tactics is BA merely making a bad situation worse by magnifying existing employee, and equally as important, shareholder fears?

What do you think?