Malaysia Airlines is likely to cut a quarter of its staff and stop flying to some cities in China and Europe as a part of the embattled carrier's revival plan that may be disclosed this week, according to people familiar with the matter.

Malaysia's state investor, Khazanah Nasional Bhd., which is seeking to take the unprofitable carrier private, has prepared a restructuring plan after the loss of two aircraft in less than five months this year, killing 537 people. Khazanah currently owns about 70% of the airline's parent firm,...