SINGAPORE - Singtel will be implementing a wage freeze across the company, this year - except for operational and support staff - as part of a cost-cutting exercise by Singapore's largest telco.
Group chief executive Chua Sock Koong said in a note to employees on Monday (March 9) that the company needed to brace itself for uncertainty because of the coronavirus outbreak and the weak business sentiment.
She said: "It's been a worrying start to the year. As we announced our third-quarter results, the Covid-19 threat emerged, disrupting not just lives but in many cases, livelihoods."
Ms Chua added that "risks to businesses have been significant enough to warrant interest rate cuts by central banks and budget measures from governments to help manage the economic fallout".
She noted that Prime Minister Lee Hsien Loong has also "not ruled out the possibility of a recession".
Ms Chua said: "The business and structural challenges we are already facing will be further aggravated by weak sentiment and economies made more sluggish by the virus threat.
"During this period, we need to strengthen our financial resilience and take out more costs. Times like these require us to tighten our belts, both as a company and as workers, to ensure the long-term competitiveness of our business."
The telco has reported a 23.8 per cent slide in profits to $627.2 million in the third quarter of last year.
Last month, Fitch Ratings downgraded Singtel's long-term foreign- and local-currency issuer default ratings (IDR) and foreign-currency senior unsecured rating to A from A+.
The agency also lowered the long-term foreign-currency IDR and senior unsecured rating of the telco's wholly-owned Australian subsidiary Singtel Optus to A- from A.
Fitch has a stable outlook on the IDRs for both Singtel and Optus.
The ratings downgrade reflects weaker-than-expected growth prospects as well as capital expenditure pressure resulting in higher leverage than previously anticipated.
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Ms Chua also informed employees that a worker who had contracted the coronavirus is in stable condition.
Singtel is also in close contact with his colleagues who had been in close proximity with him "as they work from home this week, monitoring for symptoms while contact tracing is under way", she said
"We are doing all we can to support (the patient's) family," she added.
Singtel’s management has also moved to aid those affected by the current outbreak.
Ms Chua said: “The management committee and I will each contribute at least half a month’s pay (to the Singtel Touching Lives Fund) while top management has been strongly urged to make voluntary contributions of a quarter’s month’s pay.”
She encouraged staff to give as well, adding that the company will match staff contributions dollar-to-dollar before directing the donations to the Community Chest’s Courage Fund and other beneficiaries working to fight the fall-out from the virus outbreak.
This article was first published in The Straits Times. Permission required for reproduction.