The majority investor in Malaysia Airlines said on Friday it planned to cut its workforce by 30 percent, or 6,000 workers, in an effort to make the group profitable by 2017.
State fund Khazanah Nasional Bhd also said it would spend 6 billion ringgit ($1.9 billion) on restructuring the airline. Malaysia Airlines Chief Executive Ahmad Jauhari would stay on until July 2015.
The overhaul announcement comes a day after the carrier reported a $97.6 million loss in the second quarter from a year earlier and warned by poor second-half earnings as passenger bookings continue to fall in the wake of the two aircraft disasters this year.
Read MoreAfter disasters, stricken Malaysia Airlines staff brace for job cuts
Flight MH370, which was carrying 239 passengers, went missing en route from Kuala Lumpur to Beijing on March 8 and is believed to have ended its journey in the Indian Ocean. Just over three months later, Kuala Lumpur-bound Flight MH17 from Amsterdam was shot down over the rebel-held region of eastern Ukraine, killing all 298 people on board.
The two tragedies are expected to hit MAS earnings in the months from July to December, as average weekly bookings have declined 33 percent.
The airline is set to be taken private by Khazanah by end-2014. Khazanah said it planned to re-list the group in three to five years.