Yahoo Finance ‘Headwinds we can’t control’: Virgin Australia CEO defends 750 job cuts
Virgin Australia CEO Paul Scurrah has cited headwinds the airline “just can’t control” as the reason for the layoffs announced late last month.
On August 28, Virgin Australia announced it was cutting 750 head office and corporate jobs– about 7 per cent of the workforce – after copping a $349 million loss over the past financial year.
Speaking today at the Yahoo Finance All Markets Summit in Sydney, Scurrah pointed to fuel prices and the weaker Aussie dollar as reasons behind the job cuts.
“In the Australian context, for airlines, there’s the headwinds that we just can’t control, or can only partially control,” he said.
“Fuel is a big issue for us,” he added. “Things like what happened with Saudi Arabia the other day puts a fair bit of pressure on us.”
A drone attack on a Saudi Arabian key oil facility on September 16 saw global oil prices surge and 5 per cent of the world’s oil supply pulled off the market.
Currency falls hit Virgin’s bottom line
That, and the falling Australian dollar, also contributed to Virgin’s job cuts, Scurrah said.
“Currency going down is actually really bad for us because most of the bills we pay are in US dollars.”
The Australian dollar is virtually at five-year lows, with the AUD buying only US67.5 cents today.
Scurrah has also said he would not rule out future job losses.
“As we go through this process, we'll look at what it is required that gets us into that profitability and we'll make the right decisions, as tough as they might be, to make sure we get there,” he told ABC The Business in August.
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