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Cost-cutting amid COVID-19: Firms like Temasek, SIA, CapitaLand impose hiring and salary freezes

Written by Vulcan Post Published on 

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More companies are expected to implement similar measures.

As COVID-19 cases in Singapore continue to rise, businesses are grappling with the financial impact of the coronavirus outbreak.

This in turn may affect workers, as some companies take measures such as salary or hiring freezes.

A salary freeze is when a company suspends giving wage increases to employees for a period of time to handle financial constraints. Likewise, a hiring freeze means that a company temporarily stops all nonessential hiring to reduce costs.

Temasek Holdings

For all employees at Temasek Holdings, no salary increases will be made during the company’s upcoming April compensation exercise.

The state investor announced on Tuesday (February 25) a company-wide salary freeze, including promotion raises.

Temasek’s senior management, from managing directors upward, can choose to take a voluntary pay cut of up to 5% for up to one year.

Additionally, they will also take a partial cut in their annual bonuses this year.

For every voluntary pay reduction made, Temasek will match it dollar-for-dollar. This amount, along with the budget originally set aside for salary increases, will be donated to the company’s staff volunteer initiative T-Touch.

Singapore Airlines

Aviation is one of the most directly affected industries during the COVID-19 outbreak, and demand for air travel in Asia is hit particularly hard.

Singapore Airlines (SIA) chief executive officer Goh Choon Pong told staff that the group—comprising SIA, SilkAir and Scoot—has temporarily suspended over 3,000 flights, or 9.9% of all its scheduled flights, from February to the end of May.

The flight cuts leave SIA with more than 500 cabin crew members and 50 pilots in excess.

In response, SIA has frozen hiring for “all ground positions,” and is also considering additional measures like asking staff to go on voluntary no-pay leave should the situation worsen.

“We are closely monitoring the situation and will be decisive in implementing any additional measures that may be needed. We will not do anything, however, that compromises SIA Group’s long-term competitiveness,” the company said.

On the other hand, Goh said SIA will work with tourism agencies to “aggressively drive sales, and jointly promote air travel to and through Singapore” to boost the group’s revenue.

CapitaLand

Property developer CapitaLand is freezing salaries for all staff at managerial level and above.

In addition, the company’s board members and senior management will be taking pay cuts of 5–15% starting in April, as “a show of togetherness and solidarity” with its stakeholders.

Managerial staff in Singapore will also be receiving a part of their compensation in CapitaVouchers, amounting to SGD 2 million worth of vouchers in total.

This aims to drive more support towards CapitaLand’s retail partners, alongside relief measures like rental rebates and marketing assistance.

CapitaLand said it will review these measures in six months, or when the circumstances around COVID-19 have stabilized.

Salary and hiring freezes to be expected

More salary and hiring freezes can probably be expected in coming months.

Similar methods were also used by companies during the SARS epidemic in 2003 and global financial crisis in 2008.

Vulcan Post will continue to update this article whenever new announcements are released.

This article first appeared in Vulcan Post

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