Employers in Hong Kong’s tourism sector have cut more than 1,600 jobs almost immediately after the government ended its HK$80 billion (US$10 billion) subsidy program to protect jobs put at risk by the COVID-19 pandemic.

The subsidy was paid out in two rounds starting in June up to late last month. Subsidized employers were not allowed to cut jobs during this time.

Over the past two weeks, after the subsidy program ended, a number of leading aviation sector companies and a travel agency have announced redundancy plans.

Hong Kong Airlines, which received HK$154 million, last week fired 250 employees – almost 10% of the total. Jardine Aviation Services said it plans to make 340 workers redundant this month. The company received HK$50 million.

Lufthansa Flight Meal Service, a meal supplier for Cathay flights, earlier this month sacked 285 people and required remaining staffers to go on unpaid leave from January. Another 310 people lost their jobs with two other Cathay service providers, China Aircraft Services and Sodexo.

Wing On travel agency sacked 120 workers, about 20% of its workforce, on Nov. 30 when the subsidy program came to a close. Eternal East, which operates cross-border coaches between Hong Kong and the mainland, trimmed its workforce by 30% by terminating about 200 jobs.

Shangri-La Hotels and Resorts has plans to remove 100 jobs despite a HK$116 million subsidy payout.

The latest toll excludes the 5,300 job cuts last month by Cathay Pacific, which received a subsidy up to August.

The recent sackings showed the government subsidy failed to help employees, said Mung Siu-tat, general-secretary of the Confederation of Trade Unions. Large-scale dismissals might spread to the retail and catering sectors if the pandemic continues, Mung said.

The government should set up a special unemployment aid fund and subsidize workers who have their salaries cut or go on unpaid leave during the pandemic, Mung said.

The latest redundancies will have a small impact on the city’s unemployment level, said Terence Chong, an associate professor at Chinese University of Hong Kong. The city’s overall economy was expected to gradually improve on the back of recoveries in foreign countries, Chong said. He expected that the jobless rate would remain largely unchanged up to the Lunar New Year in February.

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