Temasek said on Tuesday, 25 February 2020, that nobody on its payroll would get a raise at the April compensation round. The state investor’s freeze covered promotion increases as well.
Singapore Airlines and CapitaLand announced their own measures around the same time. All three cited the coronavirus outbreak.
Temasek: freeze, bonus cuts and a matched donation
A spokesman told Yahoo Finance Singapore that the budget originally set aside for pay and promotion increases would go to T-Touch, the firm’s staff volunteer initiative, to support the community as needed. Senior management, from managing directors upward, were asked to take a voluntary cut in base salary of up to 5 per cent for up to one year, and a partial cut in this year’s annual bonuses.
Temasek said it would match every voluntary pay reduction dollar for dollar. The cuts are held as a contingent expense for the same community efforts.
“These actions are part of our commitment to stand as one firm in support of our portfolio companies and the wider community,” the spokesman said. Portfolio companies were not told to follow. “Compensation is a matter for individual companies, and we don’t direct their decisions,” he said. The portfolio includes CapitaLand, DBS Bank, Singapore Airlines and SMRT Corporation.
The firm has frozen or cut pay before, during SARS in 2003 and the global financial crisis in 2008.
Singapore Airlines: flights grounded, hiring halted
Aviation was among the sectors hit hardest, with demand for air travel across Asia falling sharply. Chief executive Goh Choon Phong told staff that the group, which covers SIA, SilkAir and Scoot, had suspended more than 3,000 flights, or 9.9% of its schedule, from February to the end of May. That left it with more than 500 cabin crew and 50 pilots in excess.
SIA froze recruitment for “all ground positions” and said it was weighing further steps, including voluntary no-pay leave if conditions worsen. “We are closely monitoring the situation and will be decisive in implementing any additional measures that may be needed,” the company said. “We will not do anything, however, that compromises SIA Group’s long-term competitiveness.”
Goh also said SIA would work with tourism agencies to “aggressively drive sales, and jointly promote air travel to and through Singapore.”
CapitaLand: managers’ wages frozen
The property developer froze salaries for staff at managerial level and above. Board members and senior management will take pay cuts of 5 to 15% from April, which CapitaLand described as “a show of togetherness and solidarity” with stakeholders.
Managerial staff in Singapore will also be paid part of their compensation in CapitaVouchers, worth SGD 2 million in total. The idea is to channel more spending to CapitaLand’s retail partners, alongside rental rebates and marketing assistance. The company said it would review everything in six months, or sooner if the COVID-19 situation settles.
Later cuts across the island
Vulcan Post, which kept updating its tracker, recorded that the pressure grew through spring. On 23 March SIA announced it would cut 96 per cent of its flight capacity, grounding 138 of the 147 planes at SIA and SilkAir and 47 of Scoot’s 49. About 10,000 employees were affected by no-pay leave arrangements agreed with the unions. Goh doubled his own pay cut from 15 per cent to 30 per cent from 1 April.
Singtel froze salaries for all roles except operational and support staff on 9 March. SATS, the ground handler and in-flight caterer, cut management pay by 10 per cent after a leaked email on 26 February, then deepened the cuts in March. BreadTalk imposed pay cuts of 30 to 50 per cent on senior executives in ASEAN.
Other firms went further and let people go. Hotel group Banyan Tree laid off about 30 per cent of its Singapore employees, and Grab asked staff to consider voluntary no-pay leave on top of a 20 per cent pay cut for senior leaders.
Sources
- Cost-cutting amid COVID-19: Firms like Temasek, SIA, CapitaLand impose hiring and salary freezes
- COVID-19: Temasek to freeze wages, Singapore Airlines to suspend hiring
- Cost-Cutting Amid COVID-19: Hotel Group Banyan Tree Axes 30% Of S'pore Staff
Sources
- Cost-cutting amid COVID-19: Firms like Temasek, SIA, CapitaLand …
- COVID-19: Temasek to freeze wages, Singapore Airlines to suspend …
