Everything About SIA Group’s Axing of 2,400 Employees (Which Could’ve Been Worse)

By
George Yang
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Well, it has begun.

SIA Group, which comprises more than 20 subsidiaries like Scoot and SilkAir, hasn’t had a retrenchment exercise: there were pay cuts and over 6,000 employees of its 27,000-strong workforce have taken no-pay leave. An additional 1,700 have taken jobs in other organisations.

Everything has been temporary—but today, the pride of Singapore has taken the drastic action and implemented something permanently: retrenchment.

And it could’ve been worse.

Everything About SIA Group’s Axing of 2,400 Staff (Which Could’ve Been Worse)

Today (10 September), during a virtual townhall, staff were told that 2,400 people would be axed.

SIA Group said in their media release, “The Singapore Airlines (SIA) Group today announced the difficult decision to cut around 4,300 positions across its airlines. After taking into account a recruitment freeze, natural attrition and the take-up of voluntary departure schemes, the potential number of staff impacted will be reduced to about 2,400 in Singapore and in overseas stations.

“This decision was taken in light of the long road to recovery for the global airline industry due to the debilitating impact of the Covid-19 pandemic, and the urgent need for the group’s airlines to adapt to an uncertain future.”

In other words, they could’ve retrenched 4,200 people instead.

And here’s something interesting: other countries are also encouraging domestic tourisms, which means airlines could still operate within the country.

But not Singapore, because no one takes a plane from Changi Airport to Seletar Airport.

They added, “Relative to most major airlines in the world, the SIA Group is in an even more vulnerable position as it does not have a domestic market that will be the first to see a recovery.

“In order to remain viable in this uncertain landscape, the Group’s airlines will operate a smaller fleet for a reduced network compared to their pre-Covid operations in the coming years.”

Singapore Airlines Chief Executive Officer Goh Choon Phong said: “When the battle against Covid-19 began early this year, none of us could have predicted its devastating impact on the global aviation industry. From the outset, our priorities were to ensure our survival and save as many jobs as possible. Given that the road to recovery will be long and fraught with uncertainty, we have to unfortunately implement involuntary staff reduction measures.

“Having to let go of our valuable and dedicated people is the hardest and most agonising decision that I have had to make in my 30 years with SIA. This is not a reflection of the strengths and capabilities of those who will be affected, but the result of an unprecedented global crisis that has engulfed the airline industry.

“The next few weeks will be some of the toughest in the history of the SIA Group as some of our friends and colleagues leave the company. We will conduct this process in a fair and respectful manner, and do our best to ensure that they receive all the necessary support during this very trying time.”

But why not wait for a vaccine before making this drastic decision?

Here’s the thing: things won’t go back to normal even if a vaccine is developed tomorrow.

Industry groups have forecast that passenger traffic will not return to previous levels until around 2024. It’s a bit chim to explain the rationale behind that, so just remember this: even if COVID-19 is completely defeated by the end of this year, fewer people are going to travel next year. You can read this article whereby we simplify everything for you.

SIA expects to operate under 50% of its capacity at the end of financial year 2020/21 versus pre-Covid levels.

In July, SIA reported its largest quarterly loss on record—a whopping $1.12 billion net loss.

While expenses have dropped by 51.6%, the revenue for the group dropped by 79.3%. Do the maths and you’ll know how badly the company is bleeding.

As usual, the unions would be working with the affected staff.

Mr Ng Chee Meng, the man who’s had more headaches recently, has taken to Facebook to express a “deep sense of loss and sadness.”

When I sent off our FlyScoot team who volunteered to bring Singaporeans back from Wuhan earlier this year, there was a…

Posted by Ng Chee Meng 黄志明 on Thursday, 10 September 2020

According to NTUC, the unions have been working closing to avoid a retrenchment for the last six months, but like what NTUC deputy secretary-general Cham Hui Fong said, “Regrettably, these efforts were insufficient to avoid it completely and overcome the severity and prolonged impact of the Covid-19 pandemic.”

The other airline in Singapore, Jetstar Asia, has axed 180 employees in June, and most of the employees in Singapore are on no-pay leave, too.

You can read more about the fate of air travel here:

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George Yang
Email: [email protected]