SMRT joins CapitaLand in cutting wages for managerial staff in light of Covid-19 outbreak

SINGAPORE — SMRT has joined property developer CapitaLand in slashing wages in light of the Covid-19 outbreak, with the transport operator’s management staff members also getting reduced bonuses this year.

DBS bank and urban and infrastructure consultancy Surbana Jurong have no such plans now, but both said that they are monitoring the situation closely.

SMRT, DBS and Surbana Jurong are among the portfolio companies of state investment firm Temasek Holdings, which announced earlier this week that it was freezing salaries for all employees and that its senior management team — managing directors and above — will be allowed to take a voluntary base salary reduction of up to 5 per cent, for a period of up to one year.

CapitaLand said on Wednesday it is freezing or slashing pay for managerial and senior staff members.

In response to TODAY’s queries, Mr Neo Kian Hong, group chief executive officer of SMRT Corporation, said: “In light of the challenging situation arising from the Covid-19 outbreak, SMRT is implementing a salary reduction of up to 5 per cent and a 0.5-month reduction in bonus for its management staff this year.”

The company will still press on with its planned recruitment efforts for the new Thomson-East Coast Line, he added.

DBS said that it has no plans to implement wage measures, adding that it is “managing the business prudently” and monitoring the situation closely.

“As highlighted in our recent full-year financial results, assuming the Covid-19 situation is controlled by summer, we envisage only a 1-2 per cent impact to our FY2020 revenue,” a spokesperson for the bank said.

“The projected increase in bad loans of a few basis points can also be amply absorbed by the robust general allowances we have built up over the years.”

To help individuals, businesses and the community tide through this challenging time, the bank has rolled out a series of Covid-19 relief measures, including loan relief schemes and free Covid-19 relief insurance coverage.

“DBS Foundation is also working with social enterprises to distribute complimentary care packages to over 32,000 healthcare professionals and beneficiaries to support them in the national fight against Covid-19,” the spokesperson said.

DBS Foundation is an arm of the bank that is dedicated to championing social entrepreneurship in the region.

Mr Wong Heang Fine, Surbana Jurong’s group CEO, said that the company is monitoring the situation closely.

“If it deteriorates, we will consider implementing measures, including salary restraint measures, as a demonstration of our support of the wider community during this difficult period,” he said.

“Earlier this month, we made a donation to the Singapore Red Cross in aid of communities in China that are affected or at risk of being affected by the Covid-19 outbreak.”

One of the first Temasek-backed companies to implement cost-cutting measures was Sats, the ground-handling and in-flight catering service provider at Singapore Changi Airport.

The Covid-19 outbreak has caused a sharp decline in passenger and cargo volumes across Asia, impacting revenue streams for Sats, the company said in a statement.

On Feb 19, it imposed a 10 per cent pay cut for its management team, as well as provided the option of voluntary early retirement and voluntary unpaid leave.

“During this period, we are also accelerating company-wide programmes to multi-skill and upskill our employees in order to enhance their domain knowledge and help them embrace change and redeployment, so that we can rebound with resilience once conditions improve,” Sats said.

It is understood that Temasek does not direct its portfolio companies’ decision on compensation matters.

Separately, Singapore Post (SingPost), which is not a Temasek portfolio company, said on March 4 that it would be implementing hiring and pay freezes, plus pay reductions for senior staff.

In an internal circular seen by TODAY, the postal services provider stated that its hiring freeze will be applied across the entire organisation with immediate effect, except for “essential roles”.

The circular also said that from April 1, staff ranked senior vice-president and above will have their pay reduced by 5 per cent. A pay freeze and freeze in promotion increment for all staff ranked assistant vice-president and above will also be implemented. 

Mr Paul Coutts, SingPost’s group chief executive officer, wrote in the circular that the Government and leading businesses have “taken the lead in implementing internal company policies to offset the impact, both on their businesses and also on the wider economy”. 

“In a show of solidarity, SingPost is also taking a few measures amid this uncertain and challenging environment,” he said. 

Mr Coutts added that as the Covid-19 outbreak continues to impact the world, that no sector of the global economy has been “insulated”, including public service providers like SingPost. 

“I would like to thank everyone — especially our people on the frontlines — for putting yourself in the thick of delivery operations in these risky times to ensure that SingPost continues to deliver,” he added.