CNA Insider: Retrenchment In Singapore: How Can You Better Protect Your Job?

· Press,Singapore,VC and Angels

Jeremy Au was one of the guests at a CNA Insider Talking Point episode together with Mathias Goh, Sim Gim Guan, and 3 other guests who have experienced retrenchment. Led by the host Diana Ser, they explored personal stories of retrenchment including the lack of empathy in the process and the surprise and financial difficulties faced by the retrenched. They also delved into the emotional impact and corporate realities of layoffs, and the strategic reasons behind layoffs in the tech sector, stressing the importance of adaptability and personal growth.

Check out the episode here and the transcript below.


(00:00) "John":

My choice to remain anonymous because I'm afraid of potential retributory actions by my previous phone. And I'm currently still on a job search, so, just to be on the safe side.

(00:17) "Karen":

I signed the nDA before I left the company and I'm afraid of the repercussions if I was identified. It happens, I make and take something positive out of it to get more money. That's why I decided to come out. I was very unfairly retrenched. And I want to share more about companies who are irresponsibly retrenching people. There's a stigma that if you are laid off, it means that you perform badly. But that is not true. Definitely not.

(01:02) Diana Ser:

Welcome to a special one hour forum of Talking Point. We are coming to you live today. Over 14, 000 workers were laid off last year, the highest in three years. No one is spared. From the young to the old, fresh graduates to senior employees. And experts are warning that this is just the start. Meta, Amazon, Google, Shopee and Lazada.

These are just some of the companies behind the numbers you had seen earlier. Now some of you may be wondering, Am I next? Well, tonight I'm speaking to industry insiders and people directly affected to tell you everything you need to know about what really goes on behind layoffs. Here are my guests. Now you saw one of them in the video earlier opening the show, and now Karen, not her real name, joins us live.

We also have someone who has carried out retrenchments in the course of his work. Because he will be revealing insider secrets, he has asked to also remain anonymous. And now Grace, let's start with you. Why have you, you were retrenched in July last year. Why have you decided not to conceal your identity?

(02:18) Grace Gumala:

Well, I believe that retrenchment is nothing to be ashamed about. I believe that by coming to this show and by sharing my story, I hope I can empower people who are experiencing the same problem as me. Did you ever feel ashamed that you were retrenched? At first, yes, but after, um, having some personal reflect reflectment, I do believe that it's nothing to be embarrassed about because it wasn't that I was performing badly, it was it's just business and it is what it is.

(02:45) Diana Ser:

Why did you feel ashamed? Very quickly, why did you feel ashamed initially?

(02:49) Grace Gumala:

It was just the stigma of being retrenched. We always heard that it's not okay. such a bad thing to happen to us. So it's more like, the stigma that I've led to believe for so long. Okay.

(03:01) Diana Ser:

You mentioned the word stigma. We'll talk more about that later on. Now, early on, I asked Grace as well as Karen to show me what exactly was said to them when they were told that they were retrenched. I also wanted them to write down what hurt the most. Let's reveal what they have written. Grace, let's take a look at yours first. Let's see now. It says not expected at all. Promised increment just a few weeks before you were given the news. So needless to say, it came as a shock to you.

(03:34) Grace Gumala:  

Yes, it was very shocking as we were promised an increment. Not just me, all of my colleagues were getting retrenched as well. So naturally we thought that the company was doing okay and we were still going to be in the same job for at least six more months.

(03:48) Diana Ser:

Do you think that they meant it when they told you that? Or it was something to throw you off?

(03:52) Grace Gumala:

I think they meant it, but after further thinking, they decided that they needed to cut costs fast, and they had to react fast after.

(04:01) Diana Ser:

That is really interesting, to cut costs fast. Karen, let's go over to you and see what you have written on your board.

(04:08) "Karen":

Okay, so I wrote that during the process of letting me know, the manager was very obviously reading from a script. And then there was really no compassion. So he really wanted to finish me off quick and go on to the next one.

(04:23) Diana Ser:

Why did that hurt you?

(04:25) "Karen":

I feel that I was just another number on their spreadsheet to cut off. And they had no thoughts about what, how I felt, or what are some of the things that I struggle with.

(04:39) Diana Ser:

Just another number. John, let me come to you now. As a HR practitioner, you've been directly involved in retrenchment exercises. Are they just another number? Take me through the motions.

What usually happens?

(04:52) "John":

Yeah, obviously not just in a number. Because we are really dealing with people here. If you think of that, it's that any responsible companies, right, wouldn't want to do a retrenchment unless it's a last resort.

(05:05) Diana Ser:

That is what they are supposed to do, do the cost cutting as a last resort. But hearing from Grace earlier on, it seemed really last minute. Would you think, Grace, would you agree that it was a last resort?

(05:16) Grace Gumala:

It was not a last resort, it was kind of like a last minute decision, I believe. Okay,

(05:21) Diana Ser:

John, can I get back to you to tell me a little bit more about what happens, what usually happens when a company decides to go through a retrenchment exercise? For example, is it via phone call, face to face, Zoom, what happens?

(05:35) "John":

Oh, it all depends on the number of people impacted. So ideally, if it's a company that is actually a few people, It's always recommended to ensure that you do a face to face. However, during the COVID stage, when the employee were impacted, this is where the Zoom notification was done.

Of recent, when you actually notice that when companies started to retrench a lot more people, this is where email notification also started to surface.

(06:02) Diana Ser:

John, you have been through five, at least five retrenchment exercises. How emotional do people get? I've heard stories that even security personnel had to be called in.

(06:13) "John":

Yeah, it's actually a very emotional and psychologically draining process. In my experience itself, right, every, every individual that we have to notify, can actually react very differently. It is a very emotional process.

(06:30) Diana Ser:

Jeremy, let's come to you retrenchment exercises as well. Tell me through, take me through what happens.

(06:38) Jeremy Au:

So, you know, what really happens is that right now we're in a super cycle where interest rates are high. And so for technology companies that are as a result disproportionately impacted by this, everybody is kind of really seeing what the weather forecast is, not just for this year, but for the next five years ahead.

And so companies are working with their boards to basically say, what do we need to do differently? Because our assumptions, our forecast that we had made years ago, that we have promises that we have made to our shareholders are not going to be easily delivered. And so this becomes a consultative process between the founder and the CEO and executive team, as well as the board about, for example, what the budget is going to be.

And so a big part of the budget, as you imagine is comprised of headcounts. And so that strategic decision about what it takes to bring the company safely to the other side of this high interest rate storm is really the crux of what's happening and that strategic decision is made at executive team.

And as you imagine, it's very much a small type process because. You know, you don't want to be in a position where you're unnecessarily scaring people if you're not going to conduct a retrenchment exercise versus if you do, then you want to do that with the right practitioners and the right practice and the right professionalism.

(07:50) Diana Ser:

It sounds like you want to protect shareholder value or at least continue to be able to build shareholder value. Are there any other reasons why tech companies seem to be so much more affected than others?

(08:03) Jeremy Au:

So technology companies are very much like, you know, sailing boats and the old ages. And so when interest rates were low it was very much a tailwind.

It was pushing these ships. And so technology startups were able to sail very fast for the past 10 years in a row. And as a result, we've seen billion dollar companies kind of sail all the way to top. And as a result, I think people have been very excited to join these companies because it has always been good times for the past 10 years.

Unfortunately, due to the macroeconomics of the sectors that we have today, interest rates have gone much higher due to inflation. And more importantly, even though we expect it to slow in terms of the hikes it may stay flat or at this high level for several more years. And so with this as a result, Imagine now the hailwind has become a headwind.

(08:50) Diana Ser:


Macroeconomics aside, we've also read reports that some companies actually retrench workers ahead of an IPO launch to make their financials look more attractive to investors. How common is this?

(09:03) Jeremy Au: Again, when interest rates were low the public markets were much more forgiving of companies that were burning so they were not profitable because they were able to have that patience to say that we believe that these companies will become profitable in several years in public markets.

And so, Historically, there were not retrenchment exercises that were done before the IPO. But now, because the public markets are very much more impatient for profitability as they list, so executive teams have to make a decision to conduct retrenchment exercises. as part of the overall cost cutting process in order to reach profitability, so as to be able to have a successful launch on the public market.

(09:36) Diana Ser:

Would you say that that's not, retrenchments are not always the last resort in this case, particularly in this case?

(09:43) Jeremy Au:

For technology companies, a large percentage of their budget will be people, which is, I think, different from other traditional industries, for example, oil and gas, and those with a lot of capital assets.

And so, that's, Always going to be one of the larger levers that's going to be available for the executive team to make a decision

(10:01) Diana Ser: S

o if you're going to trim some fat, so to speak, that's the obvious place That you are going to hands on Karen Hearing that how does that make you feel? I think for my case my company was quite Irresponsible.

(10:18) "Karen":

It felt like they took advantage of the loophole in the mom laws whereby if worker work less than two years, they don't have to compensate at all. So, I will actually work less than a year and all the people that came in with me all got laid off together and I felt that we were unfairly laid off not because of our performance but because there was no need for compensation so we were the cheapest to lay off.

(10:44) Diana Ser:


I want to ask Grace very quickly, did you get any retrenchment benefits? Okay.

(10:48) Grace Gumala:

No, I didn't get benefits so to speak, but I get to serve two months notice which I guess it's kind of the benefit that we are offered.

(10:57) Diana Ser:

Okay, I can't see how your notice period is considered a benefit, but the reason why you were not given retrenchment benefits, what was it?

(11:05) Grace Gumala:

It was because we were asked to choose between resignation or or retrenchment. And at that point of time, given that two choices, I chose resign instead of being retrenched.

(11:17) Diana Ser:

Did you ask if you were entitled to benefits, retrenchment benefits?

(11:21) Grace Gumala:

I did ask, but my company was quite small and the, we were facing some financial issues. So being like I wanted to be an understanding worker as well and wanted to genuinely support the company. So I didn't try to push anything that would like, you know, not benefit them.

(11:38) Diana Ser:

Got it. Now let's take a look at the experience of Lionel whom we saw earlier in the show.

(11:44) "John":

It was quite shocking. I didn't know how to react, you know, I didn't know what to feel because I wasn't informed that a retrenchment exercise was going on. There was no sign, so I had no clue. He was sent an HR invite and asked to attend the meeting. When I attended it, I realised that it's actually a retrenchment exercise. I would have thought that maybe I'd at least been informed before the actual retrenchment. You There was no transparency. John, I'm going to come to you now. In the three profiles that we have heard so far, very little lead time was given to the retrenched workers. How much lead time is normally given before a retrenchment exercise? Generally, when a company has decided to do a retrenchment, it could potentially take as short as one week to a month to plan a retrenchment.

The retrenchment exercise just just imagine is right when a retrenchment exercise a responsible company have to look into Which are the position that would be impacted? Two is that which are the benefit that we are be able to ensure that the impacted receive And three what we said to the impacted and last but not least, right? What would be the messaging to the rest of the companies right and the people who stay in the company? When they say that it's last minute It's truly from their angers that because they weren't informed in advance, and typically company keep it very, very quiet about the thing because they don't want to actually rattle the rest of the company or affect the reputation. And that's where I write, typically, that it sort of comes as a surprise to the infected employee.

(13:22) Diana Ser:

It sounds like all this is due to protect, all this is done is to protect the interest of the company versus the interest of the employees. Grace, is this something you agree with?

(13:32) Grace Gumala:

Yes, to some extent that it benefits the company more, but in my personal case, I, I think the, the founder and the company was genuinely trying to help out as much as they could.

(13:45) Diana Ser:

Yeah. You, you were given very little notice when you were given the news. Take me to the day.

(13:50) Grace Gumala:

So that day we were all being called to to meet up with the founder. So each of us were given like 15 minutes time slot and he talked to us one by one. Mine was like the second one that was being called. But I, after the first person left the office, we knew right away that we were That person basically told the rest of us that she was getting laid off as well. So we knew right away that that was a retrenchment exercise.

(14:16) Diana Ser:

Yeah, you still look a bit emotional when you talk about it. Does it still hurt?

(14:21) Grace Gumala:

I mean, of course it was I It was quite a low point for me, especially last year. This year I'm so much better because I'm able to talk about it and really share about it on social media.

(14:31) Diana Ser:

Thank you for that. We'll pick it up right after this commercial break. Coming up, we review what really goes on behind closed doors before the axe falls on the employees.

Welcome back. We've been talking about the emotional toll on workers who are affected by layoffs. We are joined in this segment by another industry insider who has intimate knowledge of how companies carry out layoffs. Mattias, we've heard Grace and Karen talk about how it was really, really sudden when the termination notice came.

Is there a secret strategy to how companies time these announcements?

(15:19) Mathias Goh:

So thanks Diana. I think in my experience, there is no hard and fast rule when companies do. make these announcements. It really is a function of how prepared the HR teams and possibly the legal teams are in making sure that the employees who will be affected have their their due payments, make sure that they're paid what they do.

(15:37) Diana Ser:

John, let's go to you now. Tell me about how companies time these announcements. I mean, we've heard some scary stories about how people are even told about their retrenchment in the middle of a holiday. Tell me more.

(15:50) "John":

Yeah, it's very unfortunate. So even if it's not in the middle of holiday, when Matthias says that it all depends on how prepared the companies and the HR is, often and not sometimes the HR and the company left it to the last day of the week, which is a Friday.

Now imagine that if you were to notify them on a Friday, you're leaving the impacted employee without any support on the weekend. And on the weekend, some of the impacted employees feel too ashamed or embarrassed to even sort of tell their family members. Because it may be a stigma that they felt, as a result, no support.

(16:26) Diana Ser:

When you talk about support, John, exactly what kind of support are you talking about?

(16:30) "John":

Now, just imagine if you're impacted. This is where it's, it's, it's a very emotional training process that they are going through, right? They, they were thinking as to what do I do next? Where can I find a job? What about my family?

So there's a lot of questions that every individual will go through based on the circumstances. When I talk about support, right, As much as possible, a responsible company in HR want to ensure that they are there to answer as much questions as possible, help them through the transitions, right, so that they know that they're going to be alive and hope beyond the retrenchment.

(17:06) Diana Ser:

Clearly, not all companies do that. We wish they did, but they don't. What sorts of nasty practices, if you like, have you heard of, in terms of timing the announcements?

(17:15) "John":

What I say is right, apart from the Friday, this is where some companies may have planned it during a December. And when, when the Jeremy says that often and not it's about how much cost they need to cut, the nasty things in this case, I would say that they will jump on the opportunity to inform them at the start of the year. Like second of january just imagine the employee came back and they were notified that they will lay off

(17:41) Diana Ser:

You know retrenching someone is like breaking up there really is no good time to do this But how can we avoid the bad times but i guess I know that you think that friday is not such a bad idea Tell me why?

(17:52) Mathias Goh:

Yes, I think one perspective is that you do let the affected employees have the weekend So they don't have to come back to the office the day after and face their colleagues and explain to them what happened. You do want them to have some down time to process the information. So I think on that, from that perspective, letting the news out on a Friday does make sense.

(18:15) Diana Ser:

Let's move on now to contracts. Mathias, I know that you've helped companies to draft some retrenchment contracts. We managed to get hold of some contracts. Let me highlight some of the clauses. Employees may have to sign contracts which say they cannot disparage or say anything negative about the company.

There is also the non compete clause, which prohibits the employee from working on working with another company, which competes with the business of the employer for up to six months. Matthias, the non compete clauses, even during my time decades ago, we see that. But what is this non disparage clause?

(18:52) Mathias Goh:

Yes, so if we're talking about the non competition clause, it's really a clause that is exceptional in that it continues to bind the em, the employee after

(19:00) Diana Ser:

Tell me about the non disparage clause.

(19:02) Mathias Goh:

The non disparagement clause is, prevents the employee from saying anything or doing anything that puts the former employer in a negative light. So the purpose for that really is to protect the interests of the employer in making sure that the Disgruntled presumably employee who is out in the market looking for a new employment opportunities does not go on and Say nasty stuff about the time at the previous employer.

(19:27) Diana Ser:

Okay, john. Let's go to you to talk about the nda the non disclosure Clause, what are your thoughts about that

(19:35) "John":

When it comes to the non disclosure, right? It's very important that the company wanted to protect any Unnecessary divulge of the company operations. When you actually ask about my thought, I want to also share that NDA is also signed when an employee actually accepted the offer, when they first joined the company. It's not only signed when they actually are separated.

(19:58) Diana Ser:

Right now, let's take a look at what Lionel has to say about the contract he signed.

Karen, I want to ask you, you signed the NDA as well. How did that make you feel?

(20:23) "Karen":

Yes. I felt like I was forced to sign the NDA, meaning I don't really have a choice, because I did ask, what if I don't sign? And then the HR just said, if you don't sign, then you don't get anything.

It's kind of ironical because technically I was less than two years, so I don't really get much. But at the same time, I felt very lucky. stressed and I, that I had to sign it. And then at the same time I also asked them, what about the competitive clause, if it still held on? And the HR to that said yes.

(20:55) Diana Ser:

Were you given sufficient time to sign the NDA?

(20:58) "Karen":

I, I wouldn't say end of the day is a sufficient time.

(21:03) Diana Ser:

Matthias, can I come to you? I noticed that a lot of these contracts that we have come across, the language is very, very broad. Is that intentionally so?

(21:12) Mathias Goh:

Yes, it's usually a function of the lawyers who drafted those clauses to make sure that they protect the employers in the furthest way possible. Yeah, that's the short answer.

(21:23) Diana Ser:

Okay, Matthias, can an employee choose not to sign?

(21:26) Mathias Goh: Yes, the employee can choose not to sign, but to do so would Presumably risk all the sort of payments that the company has promised if the employee were to sign the contract So a lot of these sometimes what's at stake are ex gratia payments potentially retrenchment benefits as well So all these would be up in the air if the employee chooses not to sign

(21:45) Diana Ser:

Yeah, so basically you're put between between a rock and a hard place If you don't sign you're not going to get your benefits or any benefits at all.

(21:53) Mathias Goh:

Yes That's the unfortunate reality

(21:57) Diana Ser:

It is an unfortunate, unfair reality, would you say?

(22:00) Mathias Goh:

Well, there are guidelines which the MOMS promulgated to encourage companies to pay certain amounts of severance at least the guiding principle is between it's about a month for each completed year of service that retrenched employees should be entitled to.

But these are guidelines and if companies don't comply with the guidelines then There could be, and when we'll usually take action.

(22:25) Diana Ser:

Let me pick up on that, perhaps in the next segment. But Karen, for now, can I come back to you? With regards to the NDA, how did you, how did you feel when you put your name on the dotted line when you signed it?

(22:37) "Karen":

I feel silenced because it was so sudden and I felt very shocked. I feel like anger and everything and I cannot share with anyone. Yeah, so I really felt that I didn't have a voice and I didn't have a say in it. And telling me that it was not my fault didn't make it any better. It made me feel angrier because I know it wasn't my fault.

So definitely it was the company's fault. And you telling me doesn't make me feel any better and you don't compensate me. So what is the whole point? Yeah, that's how I felt.

(23:08) Diana Ser:

I thank you for not keeping silent and speaking your mind on this show. John, can I come to you and ask you, is there anything an employee can do?

Can we negotiate the retrenchment contract, for example?

(23:20) "John":

The employee cannot negotiate, but one thing that the employee may know is that typically when it comes to the payout, there are two parts. One is actually called the retrenchment benefit. And the other part, if it's on top, that could be called the weak wheel.

Now, typically, companies right will not pay you the good will if you don't sign. But company cannot actually not give you the re refreshment benefits right in this exercise.

(23:45) Diana Ser:

Okay we gotta move on Now, Mattias, let's go up. Tell me what goes on behind closed doors when a company decides to retrench.

(23:53) Mathias Goh:

Yes, so, by and large, you will have the HR team who will be very much involved in the exercise. Very often, they will work with the in house legal counsel, if they are. Otherwise, external lawyers might, like myself, will get involved. We will usually come up with an action plan or a step plan. We decide certain dates and then things will happen.

We'll make sure that all every affected employees contractual entitlements are Very carefully scrutinized and reviewed if there are collective agreements those will also have to be looked into but what you have are a very A team of people coming together to make sure that exercise is done Ideally, in a way that's legally compliant.

(24:34) Diana Ser:

Jeremy you run businesses, you invest in businesses. What Bataya has said, at what point do you consider the wellbeing of the retrenched employee? At what point does it even appear on the radar?

(24:47) Jeremy Au:

It does appear on the radar because there's an expectation of professionalism that every executive in every business transaction they do on a day to day basis, as well as how they treat employees who are coming in, who are in the company on the way out.

The truth is, there is a storm, and so the captain of the ship has to make a decision because the ship has to have the cargo, but also has the remaining employees will also be on that team as well. So that being said just because of the storm doesn't mean that you throw people overboard. It means that you have to offload them at the nearest port in a professional way.

And so from a investor perspective, it's really important. that we work with the executive team because the remaining team has to feel that people have departed, have been treated fairly, otherwise their morale will be low. And number two is if the company has brought on a reputation of being a bad employer, then how would it be expected when the storm is over to bring on the next wave of talent that will help them?

(25:44) Diana Ser:

Would you invest in a company that practices unfair or irresponsible retrenchment practices? Would you invest?

(25:53) Jeremy Au:

I think the fundamental reality is that An unfair practice is reflective of how the executive team is thinking and approaching the business. And the fact is that business is an iterative dimension across multiple years. And so I think a management team that does not take care of their employees on the way out is a difficult team to be investing in.

(26:18) Diana Ser:

I take that as a no.

(26:20) Jeremy Au:

Oh, never say never.

(26:22) Diana Ser:

Okay, let's move on to Karen and Grace. Both of you are fairly young. Did you expect to be retrenched,

(26:30) "Karen":

Karen. Definitely not because I didn't join for very long in that company. And it's just very sudden when they told me that I was retrenched. I thought that I was in for a long time lah. And, to be honest, I felt very regretful that I didn't choose other companies.

(26:48) Diana Ser:

Karen, I know that you are young. What kinds of financial commitments do you have?

(26:53) "Karen":

So I'm actually married and I do have housing loans. And for the role, I also took on commitments like phone bills. And yeah, they just don't stop when the contract ends.

(27:04) Diana Ser:

Yeah, I, I, I want to ask you because I have young children. Well, young children who eventually grow up and get, take a job like you. Did you ever feel cheated because when you were young? Mummy and daddy tell you to study hard and then you will get a good job. No one ever told you about retrenchment?

(27:20) "Karen":

Yeah, definitely. No one told me that if you get retrenched because you work less than two years, you don't get compensation. Yeah. I didn't know that I wasn't protected at all by the MOM laws.

(27:32) Diana Ser:

Grace, you are Singaporean. Do you have any expectations that you should be protected, for example? Because I know you ask very few questions about what you are entitled to.

(27:42) Grace Gumala:

Definitely, there's some areas which are, on hindsight, when I look back, I should have like researched better, but my goal at that point of time, I wanted to be good to my employer as well, because I'm trying to think from his point of view as a business, I know that he wasn't being very personal about it, so. Yeah, that's my point of view.

(28:01) Diana Ser:

Hire her. She's very considerate. Okay. Cheers. John, John, I want to come to you. We used to think that only older people, or at least people in the mid careers, they get retrenched. But we are seeing much younger people as well. Why is that so?

(28:17) "John":

It's not about the age, right? Because typically, if you look at the layoff, the decision is made about the business. Which are the business they need to sort of, which are the business that they need to actually shut down. So when it comes to that case, right, if you just look at it from a business point of view, whether you are old or young, right, everybody in that department or team get impacted.

(28:40) Diana Ser:

Okay, Matthias, what sorts of roles tend to be at the front lines when it comes to a retrenchment exercise?

(28:47) Mathias Goh:

I would say, typically in my experience, I've seen the more back end roles. So we will call them the cost centres. Yeah, so in every company, usually staff are sought into the front and the back end, those who are revenue making.

So the typical example would be of people who are out in the streets trying to close sales and close deals and these people contribute directly to the top line. So those people, you don't, you want to be very careful with letting them go because you let them go, you really risk the sort of revenue streams being cut down and diminished.

What we see are the people who are back end people, traditionally called cost centers. People who don't contribute top line, so for example, possibly your HR teams, legal teams are not usually spared either in house finance teams,

(29:27) Diana Ser:

Yeah. Okay. Jeremy Matias has talked about the back end employees and all that. Many of these tend to be females. Do you sense that there is a gender imbalance when it comes to retrenchment?

(29:38) Jeremy Au:

There is, from my observations, no intentional decision there. Okay. So what you see companies are doing, for example, they're shutting down entire regions entire product categories, or conducting departmental layoffs.

And so that very much is the direct function of I think what we talked about, which is how do we get to break even, you know, how do we avoid continue running losses? So

(30:01) Diana Ser:

I want to get back to the point that Matthias had just mentioned, which is that people who are in sales, for example, if you are contributing to the bottom line, then you are less likely to get hit.

But increasingly we also hearing stories about high performance, including those from sales who get axed as well. I can't wrap my head around it. Why? Can anybody, can anybody tell me? Okay. Well,

(30:23) Jeremy Au:

You know, the truth of the matter is that if it's a very big storm and the ship has been, you know, really not been kept in well, then everything is on the table, you know, for, and so the truth of the matter is that we talked about earlier, like John said there's a speed dynamic that's important.

There's not everybody has an in house legal counsel or HR team. And so these decisions are not necessarily always professional, nor is it always well executed, nor is it, you know, the best outcome in the long term.

(30:51) Diana Ser:

Okay. So there's sales, but there's also cost.

(30:53) Mathias Goh:

It is also possible that the company is having a reorganization or redirection.

So they may have decided that certain activities we want to deprioritize. And so that could affect possibly people who are in the sales functions of those areas at the company which Are going to be less relevant for the company's performance in the future. So that's one plausible explanation. I can suggest

(31:14) Diana Ser:

Grace, let me ask you do you think that you were a high performer after all you were offered an increment?

(31:19) Grace Gumala:

Yes. I mean actually i'm My review before that was very good So that's why I wasn't expecting it at all. But in my case, the company was undergoing what he said was a restructuring. So instead of hiring people from Singapore, they decided to hire remote workers from other country to cut the cost. Yeah, and they're only retaining only 20 percent of the current workers.

(31:42) Diana Ser:

Okay. Karen, what about yourself? At least according to your appraisal, what were you told? Were you a high performer?

(31:48) "Karen":

For mine, I'm actually in front end. So I do know that I perform well every single month. And actually it's quite similar to Grace in a sense that they decided to replace. As with workers from Malaysia instead because it's much cheaper.

(32:02) Diana Ser:

All right. Well with that We need to take another short break coming up. Should we get tougher on our retrenchment law? Stay with us

How do employees rights to retrenchment benefits compare elsewhere Well, Thailand implemented a new Labour Protection Act in 2019. Companies are required to inform the government 60 days before a retrenchment exercise. In Singapore, it's within five days after. In Thailand and South Korea, the minimum advance notice employers must give to workers is 1, 000.

In the U. S., it's two months. This statutory minimum is much lower in Singapore, between one day and four weeks. In Thailand and South Korea, severance pay is also written into law. Here in Singapore, there is no such statutory requirement. And you've just seen examples of how some countries deal with retrenchments.

Joining us for the segment is the Executive Director of the Singapore National Employers Federation, a body that covers 3, 500 members, including MNCs. Gim Guan, welcome. We've seen what happened in Lazada, and Lazada is also a SNEF member as well. In the absence of tougher laws, retrenchment laws, What can staff do to encourage more employers to do the right thing when it comes to retrenchment?

(33:38) Sim Gim Guan:

So together with our tripartite partners, we've issued a tripartite advisory. What may be true is, not all employers may be familiar with the advisory, where we advise companies in terms of how they would be able to manage excess manpower, and as a last resort, if they need to retrench, how to do it responsibly.

(33:58) Diana Ser:

Wait, why aren't they familiar? Yep.

(34:01) Sim Gim Guan:

It's not surprising that in many companies, especially the smaller companies they don't have a full time HR function. So the one individual may be dealing with many different issues, and depending on the priority of the day they may not be focused on all the different things that are happening both within the country as well as in terms of the legislation and guidelines that are issued.

(34:22) Diana Ser:

Moving forward, what is the most important thing that you think SNAF can do to address this situation?

(34:27) Sim Gim Guan:

Actually, the most important thing is upstream. How do we even prevent retrenchment from happening in the first place? So if you look at the numbers of retrenchment that is happening 14, 000 plus landscape of total employment about 3 million, actually what you don't see are all the companies that have done all the right things, So that retrenchment don't happen even when they are facing difficulties or even when they are having to transform Because they are helping to bring their workers along Upskilling re skilling them so that the workers continue to be able to contribute to the success of the company When the company does well I think as Jeremy mentioned earlier in the earlier days when tech is doing and booming, right?

You don't see the company retrenching because they are in the growth spurt You So companies that are doing well generally don't retrench. And so if we are able to ensure that workers are contributing. to the business outcome, then I think that is a more important step to take.

(35:24) Diana Ser:

Matthias, I think when I first saw the VT, the video for the differences in the various jurisdictions, Singapore laws are clearly less robust.

What is one glaring gap for you compared to other markets?

(35:38) Mathias Goh:

Well, I think The, the obvious gap as we've seen is that in Singapore, it is not hard coded law, the obligation on the employee to pay out a certain amount for each completed year of service. Right now, that has the effect of a guideline, right, and if a company, should a company fail to adhere to those guidelines, MOM will intervene.

As well as the rest of the tripartite partners, as we've seen in the news with the recent retrenchment. So, if something should be hard coded into law I suspect that might be one area they were relevant.

(36:08) Diana Ser:

Can I ask very quickly? They may be just guidelines, but will the courts refer to these guidelines?

(36:14) Mathias Goh:

Yes, we have seen Singapore courts refer to not just these guidelines, but other guidelines, a number of the ones that the ministry has promulgated. Those have been seriously considered by the courts when they do adjudicate on employment cases.

(36:27) Diana Ser:

Yes. Okay. So it's usually after the fact when there is a dispute, then it goes to, the case goes to court, and then the courts refer to these guidelines.

(36:35) Mathias Goh:

Yes, such as those on unfair dismissal, if I can cite an example.

(36:38) Sim Gim Guan:

Okay. I was about to say that sometimes when the company is in financial difficulty it is actually important for us to recognize that if we hard code for example, the amount retransmitment that has to be paid, then there could be a negative impact on the employees that the company can retain.

Because if they are already in financial difficulty and you are demanding that they have to pay a certain amount of retrenchment Got it. Yes, and then they won't have enough to Keep the business going which means they may have to even retrench more people.

(37:13) Diana Ser:

Yes thank you for that. I mean, in a way, in a very perverse sort of way, we kind of need to hire people first before we can fire them.

(37:21) Sim Gim Guan:

No, I think we need to make sure that we look at things in context.

(37:24) Diana Ser:

Got it. Karen and Grace, this question is for you. We've been talking about rights, so fill in the blanks for me. As, as someone who if I am retrenched, this is my question, if I am retrenched, I want the right to fill in the blanks for me.

Karen, let's come to you first. I want the right to do what?

(37:42) "Karen":

I want the right to have a minimum compensation, even if I'm less than two years. I think compensation is the most important part that was not in the document that I signed.

(37:55) Diana Ser:

Well, Gim Guan, what do you think of her suggestion, what she's just said?

(37:58) Sim Gim Guan:

So, actually, the Trapada guidelines, even though the law says that you need to be at least two years in service to be eligible for retrenchment benefit, actually, the guidelines suggest to employers that even for employees that have less than two years of service, give some kind of payment.

(38:15) Diana Ser:

Mm. Grace, did you get any, you didn't get any payment.

I think you've told us that the company didn't offer because you were less than two years.

(38:24) Grace Gumala:


Yes so all of us, instead of a payment, we get to serve two months notice yeah, so we still have to work for the next two months. That was kind of, in their term is the benefit that we are getting.

(38:36) Diana Ser: Yes. Okay. Let, fill in the blanks for me, Grace. The same question that I asked Karen earlier on. If I'm retrenched, I want the right to?

(38:45) Grace Gumala:

I think my answer would be quite similar to Karen. Like, I want the right to, kind of, know more about, like, what my rights are and get access to, kind of, like, a minimum amount of wage that I can receive as a compensation.

(38:57) Diana Ser:

That is very tough because as individuals, we hardly have any access to legal counsel. So, I mean, there's much to be said about the playing field. Kim Kwan, I'm just curious about one point because below two years, the the employer is really goodwill, ah? If you want to compensate or not. I'm just curious not to compensate.

What might be the reasons?

(39:14) Sim Gim Guan:

It could well be because of financial difficulties. Generally, that is the reason in terms of their affordability.

(39:22) Diana Ser:

Okay. Question is for the three gentlemen here. We know that moving forward, we are expecting to see more retrenchments in 2024. What are the trends like? Which sectors are we seeing from?

Which sectors should be more careful?

(39:37) Jeremy Au:

So interest rates have been high and will continue to stay high for the foreseeable future for at least one to two years. And so I think technology as a sector will continue to be highly impacted by this because, you know, the profitability, the path to that is so far away.

And so I think the worst is over, I would say, but I think there will still be some

(39:56) Diana Ser:

Are you saying the worst is over for the tech sector?

(39:59) Jeremy Au:

I would say that we're at the bottom. I think everybody who has had to cut has cut. And those who are not yet cutting are, you know, I think the writing is on the wall both internally.

(40:11) Diana Ser:

Gim Guan, beyond tech, what sectors?

(40:14) Sim Gim Guan:

Actually, it's going to be quite difficult to predict. Partly because, for one, in terms of disruption, right, you can see technology disruption, don't just disrupt the tech sector, it can disrupt many other sectors. And I think the question of the disruption impacting competitiveness and therefore impacting business sustainability.

(40:33) Diana Ser:

Amongst your members, you have many different sectors. What's your sense of what's happening on the ground? Which sectors are likely to be impacted?

(40:40) Sim Gim Guan:

The ones that are facing biggest issue now are really relating to cost, right? And the cost borrowing cost of transport supply chain cost as well as, of course, wage cost.

So with all these different factors coming in, I, I would say that in general, the pressure is quite equal across all sectors. Everybody is going to get hit. Yeah, but of course, even in sectors that are doing well, there are companies that don't do well. So, I wouldn't zoom in on any particular sector.

(41:08) Diana Ser:

Matthias, what's your take? Which sectors are likely to get hit?

(41:11) Mathias Goh:

I'm with Gim Guan on this. I think the tech sector definitely, because a lot of the big tech giants went on a massive hiring spree during the COVID period. Now they've realised that a lot of the targets that they wanted to hit for themselves, were not actually hit.

But I do think, I mean, if you look at recent data, you see that even non tech firms have had to retrench a lot of workers. Any sectors in mind? I mean, there's FMCG, there are even financial sectors, banking institutions we've seen let go of people.

(41:35) Diana Ser:

Okay. Well, it sounds to me like no one, everyone needs to be careful around this time.

I want to ask you, what is the one thing that workers can do better now to protect their jobs? Jeremy, let's start with you. The one thing that workers can do.

(41:50) Jeremy Au:

I would definitely say take advantage of the opportunity to reskill as much as possible. So stay on top of your skills be open to new employers and also be open to exploring and training for new industries.

(42:02) Diana Ser:

So new industries, , what's your take?

(42:04) Sim Gim Guan:

Same answer and probability, right? How do you ensure that you're resilient by making sure that you continue to upskill and reskill perhaps look out for what are the new things that are coming, right? Sustainability obviously is a new area that is quite important.

So if there's a area interest pivot.

(42:21) Diana Ser:

I think you can't go wrong. Growing sectors. Fatah, it's very quickly for you. Same answer.

(42:24) Mathias Goh:

Upscaling. I mean, the government has given everybody a top up of SkillsFuture credit. So I think I would say you put that to good use. Be creative and talk to people and network.

(42:32) Diana Ser:

Okay, well, be creative. Karen, I want to come to you. Would you work for a tech company again?

(42:39) "Karen":

No, I have that competitive clause. A lot of tech companies know how to take advantage of that two year loophole that MOM did not force, enforce on them. So it's just a guideline to them. It's like, just, just a guideline.

(42:52) Diana Ser:

There's no punishment. How are you making yourself more employable? For me,

(42:58) "Karen":

I tried to reduce my salary, I would say.

(43:01) Diana Ser:

So you're willing to take a pay cut. Is that what you're saying? Yes. Okay, we wish you the very best, Karen. And Grace, what about yourself? Are you finding another job? Have you found one?

(43:10) Grace Gumala:

No, I'm actually not looking for a new job as that experience of retrenchment actually got me thinking of what I really want to do in life.

And because of that, I decided to start my own business, which is a social media agency. And it, it turns out to be a blessing in disguise, the whole retrenchment thing.

(43:25) Diana Ser: Oh, congratulations. There you go. She's thinking of the bulk. She's prepared. Pivoting and being creative. Well, on that note we thank you all for coming and, and also Karen and Grace for sharing your stories.

To, for those of you who are affected or who want to be prepared for the wave of retrenchment, we hope that we have provided you with some clarity and comfort. Thank you and good night.