The airline - the joint carrier of Sweden, Demark and Norway - said it would cut 4,000 jobs, which is more than 10% of its workforce.
SAS hopes to save between 6bn and 8bn kronor ($706m-$942m) from the cuts.
Like nearly all airlines, SAS has seen passenger numbers hit by the global economic slowdown, the war in Iraq and now the spread of the deadly Sars virus.
The restructuring measures are due to be completed by 2005.
Wage deals
"These measures are necessary for the group's ability to compete and will represent a healthy platform for future expansion," said chief executive Jorgen Lindegaard.
"We have made several groundbreaking changes to old collective agreements and the unions have assumed a major responsibility for us now being able to continue our efforts to become a stronger company," Mr Lindegaard added.
Wage deals have been reached with 35 of its 39 trade unions, SAS said.
The airline is freezing pay levels for pilots this year and increasing the number hours they spend flying.
^ Back to top | BBC Sport Home | BBC Homepage | Contact us | Help | ©