At least 3,200 Malaysia Airlines employees have taken up a retrenchment offer and the national carrier will now axe more staff from its bloated headquarters, reports said today.

The ailing carrier last month launched the separation scheme which was aimed at offloading 3,000-3,500 staff at a cost of up to US$234 million as part of a sweeping turnaround plan aimed at hauling it out of the red.

The Star daily said that nearly 3,200 employees had agreed to the terms and quoted managing director Idris Jala as saying that it would now target excessive staffing at the headquarters level.

"We have a little too many people at the headquarters," he told the daily, which said there were about 3,000 staff at its two head offices.

Jala said he also wanted to cut the 13 layers of staffing in the organisation and build up its front-line service which has been heavily criticised.

Save RM200m

The campaign to cut the organisation's 22,500-strong workforce was "necessary for the carrier to reach a size where cost is within affordability", he said, adding that salaries accounted for nearly a quarter of its total operational costs.

The retrenchment project could save the airline some RM200 million ringgit (US$55.6 million) a year, he said.

Under the turnaround plan, announced in March after the airline posted a US$1.3 billion annual loss for 2005, Malaysia Airlines will surrender all but 19 major domestic routes to budget carrier AirAsia.

The troubled carrier also plans to cut unprofitable international routes and sell its landmark headquarters in the heart of Kuala Lumpur.

Malaysia Airlines has blamed its losses on crippling fuel prices and lower load factors but hopes to be back in the black by 2007 and to achieve record profitability the year after.