Published November 14, 2008

Sombre mood as retrenchment letters go out

By SIOW LI SEN
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IT was not a good day at Singapore's biggest bank yesterday as retrenchment letters were handed out.

Help given: DBS has been talking to companies in various industries to provide opportunities to retrenched staff

Some DBS staff wept and even those not affected were pretty emotional as the bank began its biggest ever retrenchment exercise.

'We're okay,' a rather emotional DBS executive at the head office told BT.

'Touch wood, I was not affected. The mood has been quite sad these few days. You can't escape it - no department can get away. Everyone knows someone who's affected,' said another who works at the Shenton Way branch.

In a stunning announcement, DBS said last Friday that it would lay off 900 people or 6 per cent of its 15,000 workforce before the end of the month as it reported its worst quarterly performance since the end of 2005.

Some 500 will be from Singapore, 300 from Hong Kong and the rest from its other offices.

'The process has begun,' said Karen Ngui, DBS spokeswoman. Chief executive Richard Stanley had said that the cuts would be 'across the board' and would include junior and senior staff in all parts of the group - 'across all business units and functions and at all levels of the organisation'.

Axed staff will get one month's pay for every year of service with the bank plus medical benefits for another six months.

Those retrenched with DBS mortgages will continue to have staff rates for six months.

DBS has arranged outplacement services and counselling for those affected.

'Staff who need help to sort out and plan their finances also received counselling and advice,' said DBS, in response to BT queries.

The bank has been in talks with companies in various industries to provide career opportunities to its staff, and has made available to staff a list of more than 20 employers who are hiring.

'I think it was handled well - the package is reasonable,' said one executive.

She noticed that junior staff were relatively less affected. 'It seemed more of the senior staff (losing jobs), and where there was duplication of job functions,' she said.

DBS confirmed that while the staff cut was across different functions and ranks, those in the junior ranks would be relatively less affected.

'It is our priority to inform staff as soon as possible, and the majority will be informed by the end of this week,' the bank said.

Mr Stanley said the cuts were needed to make DBS a 'much leaner and more streamlined organisation', which would benefit the bank for many years to come.

'We have no plans to cut beyond this, but going forward we'll always be watching the situation and aim to run our business in a very efficient manner,' he said. Estimated cost savings will be reported in the fourth quarter, he added.

'Our goal was to be decisive and quick - to get it over with as soon as possible and move on.'

Some have criticised DBS's move, especially since the bank is still reporting profits.

'It sends the wrong message to Singapore Inc. Even companies making money will point to DBS as the example, when they too decide to cut,' said a banker in another organisation.

'Losing your job at this time is not great. It's not easy finding a job,' said a former DBS worker.

But she agreed that once the bank had decided this was the way to restructure its operations, a swift cut announced publicly was appropriate.

The group's Q3 net profit plunged 38 per cent to $379 million from a year earlier, hit by a sharp rise in allowances for bad loans and exceptional market dislocations.

The bank said a wage freeze is already in place and it had considered wage cuts but decided against it because some jobs were permanently lost or 'obsolete' as the industry is going through rapid consolidation. In addition, as only half the workforce is in Singapore, with the rest in other countries, with different labour laws, 'it would take time to effect a uniform pay cut across the board and it would not be fair to have employees only in selected markets bearing the brunt of a pay cut'.