The Singapore Airlines (SIA) Group today announced that it will retrench 414 Singapore-based employees, comprising office staff, airport workers and engineering personnel.
The 414 staff represent 1.5 per cent of the SIA Group’s staff strength in Singapore. A breakdown of the number of retrenched staff by company is attached.
SIA has initiated the retrenchment exercise as a last step in response to the current operating environment, following earlier moves to stringently manage costs. These moves included deferring discretionary spending, freezing recruitment, asking management to accept wage cuts of up to 27.5 per cent, and introducing compulsory no-pay leave for cabin crew. At the same time, SIA has cut its passenger capacity by over 30 per cent since 1 April 2003.
“We have always said that we would consider retrenchment as a measure of last resort. I am sad to say that we are now at that point,” said Mr Chew Choon Seng, CEO, Singapore Airlines. “It is unfortunate, but there is no alternative if we are to ensure that the Company survives this downturn and position ourselves to compete effectively in the marketplace of the future.”
Affected staff with at least three years’ service will receive one month’s salary for every completed year of service, subject to a maximum of 25 months’ pay. Staff with less than three years’ service will not receive such payment; however, they will be entitled to all other parts of the severance package.
The severance package comprises:
- a profit-sharing bonus of 3.23 months
- a prorated annual wage supplement
- payment in lieu of notice and unconsumed leave
- the extension of medical and travel benefits until the end of 2003
SIA has offered counselling services and re-employment workshops to assist affected employees cope with the transition. Details of the available programmes are attached.
SIA will continue to make appropriate adjustments to its cost structures as necessary.