Coronavirus pandemic

Coronavirus: Range of cost-cutting measures by firms to affect 100,000

Manpower Minister Josephine Teo urged companies to make use of wage and training support measures that the Government has rolled out to help employers.
Manpower Minister Josephine Teo urged companies to make use of wage and training support measures that the Government has rolled out to help employers.ST PHOTO: KUA CHEE SIONG

An initial picture of the impact of measures that firms are taking as a result of the coronavirus pandemic has emerged.

Manpower Minister Josephine Teo said yesterday that since the middle of last month, her ministry has received about 3,000 notifications from firms implementing a range of cost-cutting measures.

These measures affect about 100,000 members of Singapore's workforce, or about 3 per cent, she said. But she noted that not all firms are required to notify the Ministry of Manpower (MOM).

Employers who implement cost-saving measures during the circuit breaker period from April 7 to June 1 must notify MOM if they have at least 10 employees and cut local workers' gross monthly salaries or foreign workers' basic monthly salaries by more than 25 per cent.

An MOM report on preliminary labour market data for the first quarter of this year, released yesterday, also showed more firms are considering cutting jobs as their business expectations deteriorate.

A total of 23 per cent of firms polled from April 13 to 17 said they would or might reduce their headcount over the next two months, up from 16 per cent of those polled from March 23 to 27.

Over the same period, the proportion that said they would or might reduce salaries also rose - to 29 per cent from 15 per cent.

Already, job losses rose quarter on quarter among retail trade and food and beverage (F&B) workers, as domestic consumption fell when safe distancing measures kicked in, said MOM.

Workers employed by accommodation providers were similarly affected as visitor arrivals fell.

MOM noted: "Labour market conditions are likely to worsen in the upcoming quarter, given the sharp fall in demand globally as well as in Singapore as firms adjust to circuit breaker measures."

The Monetary Authority of Singapore also cautioned in its macroeconomic review released on Tuesday that firms from many sectors of the economy are likely to reduce labour costs via a combination of wage and headcount reductions as revenues shrink.

NO RELIEF JUST YET

Labour market conditions are likely to worsen in the upcoming quarter, given the sharp fall in demand globally as well as in Singapore as firms adjust to circuit breaker measures.

MINISTRY OF MANPOWER

GRATEFUL

I also help out with deliveries now and I find that it can be quite tiring. I try to adapt. Even though this is a difficult time, I am thankful I can still work.

MS FUNGFUANG SUTTHIWA, a service staff member at Tonkotsu Kazan Ramen.

This comes as gross domestic product is expected to drop sharply in the second quarter, on the back of more stringent circuit breaker measures to contain the spread of the virus.

National Trades Union Congress assistant secretary-general Patrick Tay said in a Facebook post yesterday that for the first four months of the year, many companies, especially those that are unionised, used the plethora of government support schemes to reduce costs and keep their workers on the payroll.

Firms have also used measures such as mandatory clearing of annual leave, adjusting flexible wage components and leveraging absentee payroll subsidies, he said.

Mrs Teo also said during a virtual media briefing on the MOM report that if companies are really in a dire situation, employees and unions may be prepared to accept a wage cut rather than get no salary at all if the company were to fold.

"Companies and employees coming together to appreciate the situation they're in and then to work out mutually agreeable cost-cutting measures in order to preserve jobs would not be a bad thing," she said.

F&B firm Sunpark Singapore, which runs brands such as Tonkotsu Kazan Ramen and Belle-Ville pancake cafe, said it would try other cost-cutting measures rather than lay off staff.

Its director Ariel Lee said the firm has taught servers to cook or enlisted them to do deliveries.

The firm also paid staff their full salaries last month. For this month, it plans to fully pass on the Government's 75 per cent wage subsidy under the Jobs Support Scheme and pay staff their basic salary in full. Staff can also take paid annual leave.

The firm has around 50 full-time workers.

Ms Lee said: "It is a tough situation because April revenue has dropped by at least 50 per cent across our brands. But each staff member has been groomed for so long, so we try not to let them go."

Ms Fungfuang Sutthiwa, 41, a service staff member at Tonkotsu Kazan Ramen, said: "I also help out with deliveries now and I find that it can be quite tiring. I try to adapt. Even though this is a difficult time, I am thankful I can still work."

Joanna Seow

Sue-Ann Tan

A version of this article appeared in the print edition of The Straits Times on April 30, 2020, with the headline 'Range of cost-cutting measures by firms to affect 100,000'. Print Edition | Subscribe