I am panicking now ....

Pay cuts for DBS staff in the form of lower bonuses
By Ng Baoying/Timothy Ouyang, Channel NewsAsia
Posted: 25 November 2008 1532 hrs

SINGAPORE: Southeast Asia's largest bank, DBS, will cut the pay of its staff by giving lower variable bonuses this year.

A DBS statement said variable bonuses in 2008 will be significantly lower than previous years amid the current global economic turmoil. The cuts will be tiered, with senior managers bearing the brunt of the reduction compared to the junior staff.

DBS did not say how much savings would result from the pay cuts.

DBS said its senior managers will get a larger "pay cut" as their variable bonus makes up a much larger proportion of total compensation. The lender's staff get a fixed monthly salary and variable year-end bonuses, which make up their total compensation each year.

Last month, DBS retrenched some 900 staff, mainly from its Singapore and Hong Kong operations, in a bid to position itself for the challenging business environment ahead.

At the time, the lender came under some criticism from Singapore's National Trades Union Congress. NTUC Secretary-General Lim Swee Say had said that DBS had not consulted its staff union about the layoffs.

Mr Lim also said the bank had not explored other cost reduction alternatives, and was using retrenchment as a first resort. In reply, DBS said that it had frozen hiring before deciding on the retrenchments.

According to DBS' latest annual report, its employees' compensation amounted to nearly S$1.4 billion in 2007. This was about 11 per cent higher than the year before.

- CNA/ir


My thought:

I have sensed that there is something "fishy" in the above DBS statement.

Firstly, DBS had made a harsh decision to retrench some 900 staff. DBS had made no time in consulted its staff union and Singapore's National Trades Union Congress (NTUC) about the layoffs; and due to "panic" towards this current global economic crisis, DBS would not able to consider calmly on the other cost reduction alternatives, hence retrenchment was become the first resort in its decision making.

Secondly, DBS had decided further to a larger "pay cut" on the bonuses of its employees.

I always wonder how much money has DBS loss in this global economic crisis. Would DBS go bankrupt as the Lehman Brothers, though DBS is always refer as the "National Bank" of Singapore?

If DBS were "bankrupt", would the POSB, Post Office Saving Bank, follow too? Though the government of Singapore has give us the guarantee of our saving in the bank is safe, but the guarantee period only last for two years.

I am panicking now.... Can someone cheer me up by sharing his/her different viewpoints to me?

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