KUALA LUMPUR (BLOOMBERG) - Malaysia’s casino-to-hospitality conglomerate Genting Bhd and its units are planning the first group-wide salary cut since its founding in 1965.
Genting, backed by Malaysian tycoon Lim Kok Thay, is proposing as much as a 20 per cent temporary reduction of basic salary for employees based on their ranks, while Genting Hong Kong Ltd suggests up to a 50 per cent cut for those holding vice president role or higher, according to internal memo seen by Bloomberg News.
Genting Hong Kong confirmed in a statement that the salary cut will be in effect until year-end, while Genting Singapore Ltd and Genting Malaysia Bhd said they have proposed similar voluntary pay cuts with varying terms.
A representative for the group didn’t immediately respond to requests for comment.
“The businesses of the Genting Group have been badly affected, resulting in significant reduction in revenue,” the group’s chief operating officer Tan Kong Han said in the memo. “When business resumes, we would expect to face challenges to regain the level of business prior to the pandemic due to the adverse impact that Covid-19 will have inflicted on the domestic and global economies.”
Genting seeks to avoid job cuts as much as possible, even if salary remains one of its biggest cost components, he added.
Shares of the companies declined except for Genting Hong Kong, which surged 11 per cent. Genting fell 2.2 per cent, while the Singapore unit lost 3.3 per cent and the Malaysia arm slid 3.4 per cent as of 3:40pm local time.
The group that operates casinos and resorts in Las Vegas and Singapore had to scale back operations as countries impose lockdowns, while consumers shun cruises after a few ships became sites of coronavirus outbreaks. The conglomerate, founded in Malaysia in 1965, is also involved in property, plantation and energy sectors as well as life sciences.