Harare - Air Zimbabwe has laid off 200 employees - nearly half its workforce - to try to stay in the air, Zimbabwe state media reported Wednesday, as the country's economic troubles deepen.
Under long-time leader President Robert Mugabe, Zimbabwe has suffered mass unemployment, a collapse of many public services and banknote shortages as foreign investors have fled.
According to Bloomberg News, the southern African country's economy has halved since 2000.
"We have retrenched 200 employees out of the 424," Air Zimbabwe chairperson Chipo Dyanda was quoted as saying in the Herald newspaper.
"The organisation is over-bloated."
This is the latest bad news to hit the troubled national carrier, which in May was added to a list of airlines banned from EU airspace over safety concerns.
The airline, which flies to South Africa and Tanzania as well as on domestic routes between Harare, Bulawayo and Victoria Falls, has over $300 million in debts.
According to a letter seen by AFP, the state-owned company said it was acting "to contain operational costs and save the national airline's viability as a going concern."
Affected workers were sent on paid leave on Tuesday and will receive three months' salary and compensation for loss of employment, the letter said.
The 93-year-old Mugabe, currently on a medical trip to Singapore, has sometimes chartered Air Zimbabwe planes, forcing the cancellation of scheduled flights.