Singapore can get back on growth path only when the rest of the world does, said a Straits Times headline yesterday. Singapore is caught in a global economic downturn. But are Singapore companies adding to the problem? Aren’t layoffs and hiring freezes during a recession like own goals in a soccer match?
According to the Financial Times, the government-linked DBS Bank was the first Asian bank to announce large-scale layoffs, letting go 900 workers –- 6 percent of the workforce — just as Singapore was the first in Asia to slip into a recession.
But DBS isn’t 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”.
And now there is a hiring slowdown by Singapore Press Holdings. SPH chairman Tony Tan said yesterday the company with 3,500 workers would help its people keep their jobs. But he added,“'We have slowed down our hiring, instituted a pay freeze for all senior management staff, tightened our operations and strengthened our financial resources.”
A hiring slowdown means rising unemployment. Which will be duly reported by the Straits Times and other SPH newspapers and radio stations as well as the television channels it jointly owns with MediaCorp. People will be asked how they are coping with the situation, experts interviewed on chances of a recovery. But in the end the media is like any other business, focused on the bottom line.
Newspapers, of course, are not as indispensable as bank accounts. But SPH has fireproofed its business by diversifying into all kinds of ventures from broadcasting to real estate.
SPH made a net profit of
- 437 million Singapore dollars in the financial year ended August 31, 2008
- 506.2 million Singapore dollars in 2007
- 428.5 million Singapore dollars in 2006
- 494.7 million Singapore dollars in 2005
- 546.3 million Singapore dollars in 2004
- 378.7 million Singapore dollars in 2003 (“in a difficult economic climate”, it said in a press release which recalled the Sars outbreak in March 2003)
- 307.4 million Singapore dollars in 2002 (“amid a difficult trading environment” and “an economic slowdown”, said a press release)
- 340.8 million Singapore dollars in 2001
As its own records show, it has made millions of dollars of profits even during recessions.
But the economy isn’t helped when even profitable businesses lay off or stop hiring workers.
Click here to read the SPH chairman’s full speech.
Related posts:
