An internal source has revealed a townhall session was held on Thursday morning with several key units under AirAsia Berhad to announce the decision.
The decision was said to have been reached for several months now but was said to be postponed as the termination of workers was to be the company's last resort.
Employees involved in the retrenchment exercise will be notified personally by their managers on Thursday afternoon, the source said.
However, the extent of the workforce downsizing was not disclosed during the townhall but Astro AWANI understood it would involve all divisions.
The source added that a townhall involving flight attendants would be held by noon on Thursday.
AirAsia has about 25,000 employees worldwide, with 10,000 in Malaysia alone.
AirAsia's operations had been under intense pressure following the implementation of the Movement Control Order (MCO) that saw its aviation operations halted.
So far, only AirAsia Malaysia, Thai AirAsia and AirAsia India have resumed operations but were restricted to domestic flights while AirAsia Japan, the Philippines and Indonesia have not been operational.
AirAsia Malaysia has 254 aircrafts with most of them grounded.
On June 13, AirAsia Berhad Executive Chairman Datuk Kamarudin Meranun was quoted as saying AirAsia was considering raising fares following losses incurred as a result of the MCO enforcement.
However, Kamarudin also said the increase in fares would not be a burden but discussions on the proposal were still ongoing.
Astro AWANI is still awaiting an official statement from the airline on the matter.