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SINGAPORE: Multi-national companies in Singapore say they are likely to follow the government's move to adjust pay and bonuses. But they also say they are exploring other cost-cutting measures first, such as not hiring new people.
Still, they say the government's decision announced on Monday sends a strong signal at a time when the economy is hitting a rough patch.
Singapore's political leaders and top civil servants will face a pay cut of up to 19 per cent next year. Some say this shows the government is biting the bullet like other Singaporeans during tough times.
Phillip Overmyer, chief executive of Singapore International Chamber of Commerce, said: "Here it's very clear the government is taking a leading role, saying we're all in this together, the government is going to take a hit, just as we always said we would and we know companies are going to take hits also.
"Let's try and partner and keep people employed. I think it's a very strong message for Singapore and it fits (with) what Singapore is so good at."
Some government-linked organisations have also taken steps to keep their costs down. Senior management of investment company Temasek Holdings, for instance, has volunteered to take pay cuts of between 15 and 25 per cent.
Mr Overmyer said: "You're seeing Temasek taking this fairly important leadership step, saying, let's cut salaries so that as the year goes on, we're in a much better place to survive through the end of the year.
"It is recognising the future and cutting pay in a business environment where this is not the way you would have done it normally."
For Kenichi Kuroya, the managing director of shipping firm "K" Line, the government's move is likely to prompt actions of his own.
He said: "The first impact... must be reflected on me... Before reducing or adjusting our staff, I think each leader must take some responsible action and I think I'm going to reduce my salary... minimum 10-15 per cent... otherwise, there would be no impact."
Despite a projected drop in profit from US$110 million to US$38 million next year, the company is still hoping to pay its employees up to four months' bonus by the end of the year.
In fact, the company is taking it one step further to retain its staff by planning to offer a pay increment of about 5 per cent next June.
Companies interviewed said they are also exploring pay and bonus adjustments as one of the many options to keep costs in check to cope with the economic downturn.
Some measures include freezing headcount and finding other synergies among their existing staff.
- CNA/ir
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