SIA Group axes 2,400 workers in Singapore and overseas — almost 9% of its workforce

• ​SIA Group will axe 2,400 workers in Singapore and overseas
• This represents almost 9 per cent of its workforce
• CEO Goh Choon Phong said this is “the most agonising” decision he has made in 30 years at SIA Group

SINGAPORE — The Singapore Airlines (SIA) Group announced on Thursday (Sept 10) that it will be retrenching about 2,400 workers across SIA, SilkAir and Scoot in Singapore and overseas.

This represents almost 9 per cent of the group’s employees. According to its latest annual report, the SIA Group, which comprises the three airlines as well its subsidiaries such as SIA Engineering Company, has 27,600 employees. 

The three airlines have about 21,300 employees as of March 31 this year.

Mr Goh Choon Phong, the chief executive officer of SIA, said in a message to all employees on Thursday that the company needs to cut around 4,300 positions. But due to measures it has put in place since March, the group has been able to reduce the number of involuntary job reductions in this retrenchment exercise.

The group has put in place a strict recruitment freeze since March this year — vacancies that opened up due to resignations and retirements were not filled.

The group had also offered a Special Early Retirement Scheme, the most generous in SIA’s history, to ground staff members and pilots and a Voluntary Release Scheme to cabin crew, to support those who had already considered leaving their jobs for personal reasons.

“Collectively, these measures have allowed the group to eliminate some 1,900 positions and helped to mitigate the impact on staff,” Mr Goh said in his message.

He added that the next few weeks will be “some of the toughest” in SIA Group’s history, as thousands of workers will have to leave.

“Having to let go of our valuable and dedicated people is the hardest and most agonising decision that I have had to make in my 30 years with SIA,” he wrote.

“For our impacted colleagues, please know that this is not a reflection of your individual strengths and capabilities. It is the result of an unprecedented travel paralysis brought about by a global pandemic.”

He added: “Please also be assured that we will conduct the process in a fair and respectful manner, and do our best to ensure that you receive all the necessary support during this very trying time.”

The company has started discussions with Singapore-based unions and will work closely with them to finalise arrangements for affected employees, Mr Goh said.

In a separate statement, Ms Cham Hui Fong, deputy secretary-general of the National Trades Union Congress (NTUC), said that over the past six months, Singapore Airlines Staff Union (SIASU) and Scoot Staff Union (STSU) have worked closely with management on various measures to mitigate retrenchment as much as possible.

“Regrettably, these efforts were insufficient to avoid it completely and overcome the severity and prolonged impact of the Covid-19 pandemic. SIASU and STSU worked with management to ensure that the retrenchment exercise was fair, taking reference from the NTUC Fair Retrenchment Framework and other tripartite advisories.”

TURBULENT TIMES FOR AIRLINE GROUP

Mr Goh said that the decision to retrench the employees was based on the expectation that the road to recovery for the company will be “long and fraught with uncertainty”.

No one could have predicted the devastating impact of Covid-19 on the airlines industry earlier this year, he said, adding that it is still unclear which airline carriers will survive this crisis.

SIA Group’s priorities were to ensure its survival and save as many jobs as possible, Mr Goh said, noting that it was among the first airlines in the world to secure the liquidity to meet its cash flow requirements.

It also reduced capital and operating expenditure since the onset of Covid-19 by deferring non-critical projects, worked with suppliers and partners to reduce costs, reschedule payments and adjust aircraft delivery streams, and implemented human resources measures such as salary cuts and no-pay leave schemes.

However,  the future remains “extremely challenging” for the group, he said, with the pandemic yet to be under control and tight border restrictions across countries.

“Today, the SIA Group operates only 8 per cent  of our capacity compared to pre-Covid levels, and we expect to be at less than 50 per cent at the end of the financial year. In the meantime, the prognosis for air travel has worsened, with industry groups projecting that passenger traffic will not return to pre-Covid levels until 2024.” 

Transport Minister Ong Ye Kung said in a Facebook post later in the day that the Government has rolled out support measures, including the Job Support Scheme, to defray business costs and protect jobs, with the aviation sector having received the strongest support.

"SIA has also raised significant capital with the support of its majority shareholder. They have delayed this workforce reduction as long as they can, but with air travel decimated by Covid-19, this has unfortunately become inevitable."

He said that the "vast majority" of the 2,400 workers to be laid off are foreigners. 

"The Government will do all we can to support the affected workers. We will work with NTUC and industry partners to place the workers in jobs, help them transit to other industries, or enrol them in suitable industry attachment and traineeship programmes. I am sure their skills are much needed elsewhere, too.

"More importantly, we will continue to press on, to restore air travel in a safe manner, to get SIA planes back up in the sky, and revive our air hub," Mr Ong said.

In a Facebook post on Thursday evening, NTUC secretary-general Ng Chee Meng said that he has met with union leaders from the aviation and aerospace sectors on several occasions over the past few months.

During these meetings, he said that they spoke about steps taken by management and the unions to help workers during this downtime and mitigate retrenchment.

"While outcomes may not always be as desired, I appreciate these unwavering efforts," he wrote.