SINGAPORE — State investor Temasek Holdings and Singapore Airlines are taking steps to reduce costs as the operating environment becomes more challenging amid the COVID-19 coronavirus outbreak.
Temasek will freeze all salaries as well as promotion increases, and partially cut annual bonuses for the senior management team this year, a spokesman said in an email reply to Yahoo Finance Singapore on Tuesday (25 February).
The budget originally set for salary increase and promotion increases will be donated to its staff volunteer initiative T-Touch and be used to support the community as needed, according to the spokesman.
Temasek has also asked senior management to voluntarily reduce their base salaries by up to 5 per cent for up to a year, the spokesman said. The voluntary pay cuts by senior management will be held by Temasek as a contingent expense, to be used for the same community-related 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.
Temasek has implemented salary freezes and reductions several times in the past, including during SARS outbreak in 2003 and the global financial crisis in 2008.
When asked if any of the portfolio companies will be required to do the same in implementing the wage freeze, the spokesman noted that “compensation is a matter for individual companies, and we don’t direct their decisions”.
Its portfolio of companies include CapitaLand, DBS Bank, Singapore Airlines and SMRT Corporation.
Separately, The Straits Times reported that national carrier Singapore Airlines has imposed a hiring freeze and is mulling other measures, including possibly asking staff to go on voluntary no-pay leave.
The report cited a note by SIA chief executive officer Goh Choon Phong to all SIA staff on Monday about the hiring freeze.
“SIA has implemented a general recruitment freeze for all ground positions in response to COVID-19,” said SIA in an email reply to Yahoo Finance Singapore. “We are closely monitoring the evolving situation and will be decisive in implementing any additional measures that may be needed. However, we will not do anything that compromises the SIA Group’s long-term competitiveness.”
SIA added that these are the steps taken thus far.
The carrier and its regional arm SilkAir had announced on Monday additional cuts to their flights between February and May, after the decision last week to cancel more than 700 flights as demand fell because of the COVID-19 outbreak.
The cancellations will cut the scheduled capacity of the two airlines by 7.1 per cent from February to end-May, SIA said in a Facebook post.
SIA said it will continue to monitor the situation, and “be nimble and flexible in adjusting our capacity to match the changing demand patterns in the market.”
Singapore has 90 confirmed cases of COVID-19 as of 24 February. The outbreak has infected over 79,000 people and killed more than 2,500 in China. Outside of China, the virus has spread to about 29 countries and territories, and killed over 20 people.