The economic crisis is hitting even the usually safe medical sector, with medical tourism down by up to 7 per cent at Parkway-operated hospitals like Mount Elizabeth. In an effort to stay in the game, the group is cutting salaries and laying off non-clinical staff. -- ST PHOTO: ALPHONSUS CHERN
HEALTH-CARE group Parkway Holdings is slashing pay on the corporate floor by up to 35 per cent while about 148 employees here will be laid off.
It is the most dramatic sign so far that the economic crisis is hitting even the usually recession-proof health sector.
The layoffs will affect less than 4 per cent of the firm's local workforce of about 3,700. It is one of Singapore's largest health-care operators and employs about 9,000 staff worldwide.
The cuts are being made in corporate services - mainly administrative and head office positions - and apply to all job functions and across all seniority levels. The axed staff were told yesterday.
A company spokesman said that no nursing or clinical staff are being laid off. Doctors will also not be affected as most are not employees but owners of their practices who lease clinic space and hospital facilities from Parkway.
Bosses are being hit as well with salaries of senior management to be cut by 15 to 35 per cent and middle management by 5 to 10 per cent. And company directors will waive their fees this financial year.
Parkway's annual report stated that chairman Richard Seow made between $500,000 and $750,000 last year while chief executive Lim Cheok Peng earned between $2.25 million and $2.5 million. The company paid out $900,205 in directors' fees. Staff costs rose 12 per cent to $259.6 million.
The pay of unionised staff will not be affected, while there are also no plans to retrench overseas staff at the moment.
'The group is not immune to the current global economic challenges and has decided to initiate additional pre-emptive measures to enable the group to navigate through current market challenges,' the company said yesterday.
Parkway operates Mount Elizabeth and Gleneagles hospitals here but the bulk of its corporate staff are based in Parkway's Somerset Road headquarters.
The axing yesterday came as a surprise as Mr Seow said last month that the group had no immediate plans to cut staff numbers or delay hospital projects here and overseas.
Despite the new measures, Parkway will remain committed to its major projects including the 350-bed hospital in Novena scheduled for a 2011 completion, the spokesman said.
It will also freeze the hiring of non- clinical corporate workers and business travel, while implementing a centralised purchasing plan to cut costs across Asia.
Mr Seow said: 'While Parkway's regional health-care business remains sound and long-term industry fundamentals remain intact, we are taking necessary and prudent actions to prepare the company for a more difficult and challenging market environment ahead.'
The number of medical tourists at Parkway hospitals here fell 5 to 7 per cent in the September to November period and the group expects drops of 10 per cent as consumers in the region cut spending.
Last year Singapore received 400,000 medical tourists.
Mrs Cheong-Law Swee Hong, deputy secretary general of the Singapore Manual and Mercantile Workers' Union, which represents some of the affected staff, said that management has been cooperative and has kept the labour union updated.
