More companies announce wage cuts, no-pay leave amid COVID-19 economical downturn
02 May, 2020
More businesses are announcing wage cuts or nudging employees to go on no-pay leave amid the ongoing COVID-19 pandemic, which includes cast a dark cloud over many industries and the economy.
The Singapore central bank earlier this week warned that the united states will enter a recession this season, and cautioned that wages, instead of jobs, will “bear the brunt” of the downturn in the near term as companies tighten their belts on the back of declining revenue.
Already, some companies did so lately.
With the aviation industry under serious turbulence, national carrier Singapore Airlines announced a slew of cost-cutting measures in March, including wage cuts because of its management team and compulsory no-pay leave for employees.
BreadTalk Group can be cutting senior and middle management’s pay by 10 to 50 per cent for 90 days until June, affecting about 137 employees across Southeast Asia.
A survey conducted in March by human resources consultancy Mercer Singapore showed 3 per cent of organizations here having cut workers' salaries and another 5 % mulling this option.
Eleven per cent of those surveyed have, meanwhile, reduced wage increment budgets, with another 22 % likely to do so.
Among the most recent, UK-based insurance professional Aon announced on Monday (Apr 27) that 70 per cent of its staff worldwide will take a pay cut of about 20 % from May 1, while salaries of its chief executive and other senior executives will be halved.
In a memo to employees, CEO Greg Case said the firm has opted for wage reductions, instead of layoffs, to “protect jobs”.
The pay cuts will be “temporary”, said Aon, without specifying a time frame.
Mr Case said it could possibly be “prematurily . in this economic crisis to regulate how (the business will) in the end mitigate these action”.
Touching how the pay cuts were derived, Aon’s top boss said these were based on “a couple of criteria, like the cost-of-living” in the countries the business operates.
“Predicated on that analysis, we've set a floor in each country. This implies that approximately 30 % of our colleagues will dsicover no reduction,” he said, adding that earnings cuts for the rest of the 70 per cent will be achieved in “accordance with local practices”.
When contacted, a company spokesperson declined to comment about how many employees in Singapore will be affected.
According to 1 employee, a video conference was held this week for staff in Singapore to raise questions about the company’s latest move.
Another who spoke to CNA on condition of anonymity said employees have already been told to wait for more details. Aon employs about 808 persons in Singapore.
At Grab, staff in Singapore have already been encouraged to be on voluntary no-pay leave, and the salaries of its senior management have already been cut by up to 20 %.
In an email to its drivers - signed off by Grab Singapore’s head of transport Andrew Chan and a copy of which was delivered to the media on Wednesday - the ride-hailing giant said it's been “badly hit” by the coronavirus outbreak, with ridership numbers continuing to fall by double-digit percentages.
With even the big boys struggling, smaller businesses, particularly those in industries which may have been hit hardest by COVID-19 measures, are mulling their options.
Mr Lim Wee Hsien, who co-owns Wursthans Switzerland at the new Paya Lebar Quarter retail center, said revenue at his 40-seater everyday diner has plunged by 90 % because the circuit breaker rules were enforced.
The six-month-old restaurant remains open during this period, although for shorter hours, so as to keep the new brand going and earn whatever it could from deliveries to cover operating costs.
Government policies like the Jobs Support Scheme to subsidise local employees’ salaries, have helped to ease cashflow concerns but with the circuit breaker extended until Jun 1, the outlook remains “bleak”, said Mr Lim.
Mr Lim said he has since discussed the opportunity of a 20 to 30 % pay cut with his five full-timers during the circuit breaker period, given the shorter operating hours.
Source: www.channelnewsasia.com
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