Singapore’s largest companies froze hiring and suspended pay rises on 26 February 2020 after the Ministry of Health confirmed 93 local COVID-19 cases and airlines, retailers and property groups warned that earnings were evaporating. CapitaLand, Temasek Holdings and Singapore Airlines announced the measures within hours of one another, saying the moves would protect cash and keep workers employed until travel and sales recover.
CapitaLand halts merit raises and cuts board pay
CapitaLand told staff after markets closed on Wednesday that merit increases for 2020 are cancelled and that wages for managers and above will be frozen from 1 April. Board directors and senior executives will give up between 5 and 15 per cent of their salaries, with the exact share pegged to rank. Chief executive Lee Chee Koon said the step “is a show of togetherness and solidarity with its stakeholders” and will free funds to keep projects on schedule and contractors paid. The developer, which owns 19 shopping malls in Singapore and scores more across China, has already seen footfall drop by more than 30 per cent in some complexes, according to mall workers who asked not to be named. Rental rebates rolled out last month have added further pressure on liquidity, making the pay freeze the quickest way to preserve cash without laying off the 11,000-strong workforce.
Temasek withholds promotions and bonuses
State investment agency Temasek Holdings, which manages S$313 billion in assets, followed with an internal memo telling all 800 employees that the annual budget for promotions and salary increments has been “set aside” until at least October. Senior management will also surrender part of their 2020 bonuses; the money will be channelled into a new contingency fund for community projects linked to the virus response. A spokesperson said the extent and duration of the freeze “will depend on how market conditions evolve” and noted that similar curbs were imposed during SARS in 2003 and the global financial crisis in 2008. The firm is not government-funded, it invests proceeds from a portfolio that includes stakes in DBS, Singtel and PSA International, so the decision signals expectations of lower dividends from key holdings this year.
Singapore Airlines grounds 3,000 flights and stops recruitment
Singapore Airlines (SIA) imposed an immediate hiring freeze for all ground positions and suspended non-essential duty travel after revealing that 3,000 flights, or 9.9 per cent of the schedule from February to May, have been cancelled. Chief executive Goh Choon Phong told reporters that forward bookings have “deteriorated sharply” and that the group, which includes SilkAir and Scoot, is “closely monitoring the situation”. Crew rosters are being adjusted to avoid compulsory redundancies, but managers have been told to prepare for unpaid leave schemes if demand keeps falling. The carrier flew 1.3 million passengers in January, down 3.5 per cent year on year, and analysts expect February numbers to show a double-digit slide when they are released next week. SIA shares closed at S$8.65 on Wednesday, the lowest level since 2009, valuing the company 25 per cent below its book value.
Smaller firms adopt shorter weeks and deferred pay
Beyond the headline names, engineering contractor Sembcorp Marine and hospitality group Hotel Properties have asked staff to accept four-day weeks or defer up to 10 per cent of monthly pay until year-end. The Singapore Manufacturing Federation surveyed 200 small and medium enterprises this week and found 42 per cent already implementing some form of wage restraint. Labour chief Ng Chee Meng urged employers to tap the government’s S$5.6 billion stabilization package, unveiled on 18 February, before resorting to retrenchment, but acknowledged that “hard choices” lie ahead if the outbreak persists past June. The National Trades Union Congress has opened a hotline to mediate disputes and is encouraging firms to adopt the tripartite guidelines on flexible work schedules released last month.
Health picture improves but firms stay cautious
Health officials said 64 of the 93 confirmed patients have been discharged, while the remaining 29 are in stable condition, giving the city-state one of the highest recovery ratios globally. Still, companies are modelling for a six-month revenue slump. Economists at DBS Bank now predict GDP growth will slow to 0.9 per cent in 2020, down from an earlier forecast of 1.8 per cent, and warn that every month of disrupted travel wipes roughly S$500 million off tourism receipts. Until regional infection curves flatten and China factory output rebounds, the hiring and pay freezes signalled on Wednesday are likely to spread, turning what began as isolated cost controls into a broad wage stagnation that could outlast the virus itself.
The measures announced this week mark the sharpest collective pullback in Singapore’s labour market since 2009. By choosing pay restraint over immediate layoffs, companies hope to keep skilled staff on the books for a quick rebound once flights resume and shoppers return. Whether that gamble pays off depends less on boardroom solidarity than on how soon the world outside the boardroom gets moving again.
