Coronavirus: Smaller firms struggle to avoid laying off workers

General practitioner Dr Iroshini Chua said she is doing all she can to keep their four full-time staff at Dr Kevin Chua Medical & Aesthetics on the payroll. PHOTO: COURTESY OF IROSHINI CHUA

Dinner and dance events, product launches and conferences - these are the lifeblood of Mr Joshua Tan's events company.

But with zero business since early February, it is flatlining.

Last month, he paid his two full-time staff 50 per cent of their wages and took none for himself.

Now, he is thankful for the 75 per cent wage subsidy from the Government that kicks in for the month of April. But next month, when the wage subsidy dips to 25 per cent, he will have no choice but to let his employees go or make them take unpaid leave with the option to return when the business recovers, he said.

Unlike large corporations which have bigger cash reserves to keep their staff on the payroll, many smaller companies across industries say they understand the Government's call to protect jobs, but are struggling to avoid laying off their workers.

"One of my staff has gone to do GrabFood delivery. My designer is doing freelance design work now. I told them to do anything that can bring them income," said Mr Tan, 41, who co-founded Trilogy Events in 2010.

He said that monthly overheads, including wages and rent at an industrial building, come to about $20,000. "My company is still servicing two bank loans, and the reserves are being used to pay rent," he said. He added that he is still waiting for his landlord to confirm the passing down of rental rebates.

The move to Dorscon orange on Feb 7 was the start of a downward spiral for Mr Tan's business.

He said: "Our industry was one of the first to be hit. I don't think the market will resume so fast for the events business. Having a dinner and dance would be the last thing on people's minds."

Last week, Deputy Prime Minister Heng Swee Keat urged firms to take the longer-term view and retain and upskill workers for the future. This is because when people are out of a job, there is a major cost to individual lives and to society, he told Parliament last Tuesday.

He announced a slew of measures to help businesses keep a lid on their costs, ranging from labour cost subsidies to rental rebates to higher financing support.

Dr Iroshini Chua, a general practitioner who co-founded Dr Kevin Chua Medical & Aesthetics with her husband Kevin Chua, said she is doing all she can to keep their four full-time staff on the payroll. Their wages amount to about $16,000 a month, including Central Provident Fund payments.

The clinic can no longer offer aesthetics treatments - which form the bulk of the revenue. Meanwhile, walk-in GP patients have dwindled to just three a day.

Dr Chua said: "The general sentiment is that since we are in the medical field, we must have an iron rice bowl in this crisis, but we really don't. We are at the mercy of landlords just like everyone else."

With the future looking bright just six months ago, the couple signed a lease for a new 1,200 sq ft clinic space in Orchard Road for $11,000 a month. Dr Chua said she is unsure if she will get rental rebates as she is unable to contact her landlord.

"We hope not to be in a position to retrench our staff but if we are unable to pay their salary, we would encourage them to find a workplace that could support them and their families," said Dr Chua.

Meanwhile, workers hired on a project basis have been left entirely bereft of a salary. Mr Watson Tan, 49, director of Upfront Models, said close to 100 models and talents in his agency have lost their income after more stringent social distancing measures put a halt to fashion shows and commercial photo shoots.

One company that is determined to keep its staff, no matter what, is GF+A Global, which imports premium European tiles.

Its founder Andy Lim, 47, said many of his 11 full-time staff, whose monthly wages amount to more than $35,000, have been with his company through good and bad times. His storeman and designer have been with the company since its first day of business in 2006.

"Our Government has done its part. We need to do our best to keep our workers. If we can survive this, we will become a stronger team. I believe our business will bounce back. It will not be at this stage forever," said Mr Lim, who has been using the downtime to ramp up his company's digitalisation efforts.

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A version of this article appeared in the print edition of The Straits Times on April 14, 2020, with the headline Coronavirus: Smaller firms struggle to avoid laying off workers. Subscribe