AIRPORT and food services provider SATS has slashed pay for its management team and is letting staff opt for voluntary early retirement and voluntary unpaid leave as pressure mounts from the coronavirus outbreak.
The measures were implemented last Wednesday (Feb 19) to save costs in order to save jobs, SATS told The Business Times on Thursday.
The management team, comprising all vice-presidents and above, are taking the lead with a 10 per cent pay cut, SATS said. Employees aged 55 and above were given the option of early retirement. Staff were also told that they could request to go on voluntary unpaid leave, and that their jobs would not be replaced.
SATS said in a statement: "The Covid-19 epidemic has caused a sharp decline in passenger and cargo volumes across Asia, impacting revenue streams for SATS. We are, therefore, taking proactive steps to mitigate the risks and impact of the situation on our business and our people.
"During this period, we are also accelerating company-wide programmes to multi-skill and upskill our employees in order to enhance their domain knowledge and help them embrace change and redeployment, so that we can rebound with resilience once conditions improve."
SATS shares have fallen by 17.2 per cent or S$0.87 since the year began to S$4.19 as at 10.30am on Thursday.
On Feb 13, SATS said that net profit for the three months ended Dec 31 fell by 13.9 per cent year on year to S$59.3 million, even as revenue grew by 17.6 per cent to S$545.6 million against the year prior. Higher expansion-related costs were a drag on the bottom line.
SATS warned then: "The Covid-19 epidemic has caused a significant reduction in air traffic in China, with a sharp decline in passenger and cargo volumes across Asia. Depending on the duration of this epidemic, there will be a consequential impact on the short-term financial performance of SATS."