Malaysia Airlines is to shed 6,000 workers as part of an overhaul to revive its damaged brand after being hit by two passenger jet disasters.
The staff reductions represent about 30% of its workforce of 20,000.
The airline will be taken completely under the wing of the Malaysian government. The state investment company that owns 69% of Malaysia Airlines plans to take 100% ownership.
Investigators continue to search the southern Indian Ocean for Flight 370, which veered far off-course while en route from Kuala Lumpur to Beijing on March 8 with 239 people on board.
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Last month, 298 people were killed when Flight 17 was shot out of the sky as it flew over an area of eastern Ukraine controlled by pro-Russian separatists.