Maybe one should not make too much of it. But, however minor, cracks are appearing in Singapore. Labour union chief and cabinet minister Lim Swee Say has criticised the government-linked DBS Bank for retrenching 900 workers – 6 percent of the workforce – without consulting the union.
The question is, were the principal shareholders consulted? For that would mean going all the way up to the Prime Minister’s wife, Madam Ho Ching, who is the CEO of Temasek Holdings, the Singapore sovereign wealth fund, which has a 28 percent stake in the bank.
Not all Temasek-linked companies are laying off staff. The telco, SingTel, has said layoffs will be made only as a last resort.
DBS isn’t cutting staff because it’s losing money.
It reported a net profit of 379 million Singapore dollars ($252.3 million) in the third quarter. But that’s a 38 percent drop from a net profit of 610 million Singapore dollars a year earlier. So, it wants to run a “tighter ship”.
But what about the Singapore economy as a whole? Any rise in unemployment hurts the economy. As a government-linked bank, shouldn’t DBS be looking at the bigger picture? It’s the first Asian bank to announce large-scale layoffs in the current slowdown, according to the Financial Times.
True, Singapore’s 2.2 percent unemployment rate is one of the lowest in the world. But when a profitable government-linked bank fires workers, what kind of a signal does it send to other companies?
Update: The government wants unions to be consulted in future. But the bad news is there will be more job losses. Channel NewsAsia reports:
The Manpower Ministry will soon release guidelines on how to manage excess manpower in light of expected increase in retrenchment in Singapore.
The guidelines will include what's called responsible retrenchment, where employers work with unions to explain the situation to workers before serving the termination letter.
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