KUALA LUMPUR: Malaysian financial services group CIMB has asked its 36,000 employees to consider taking up to six months of unpaid leave as it aims to cut costs in the global economic slowdown, a top official said on March 30.
CIMB is the first major Malaysian company to ask staff to go on unpaid leave.
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One of top most shitty jobs in management life is letting people go. I am going just "throw it" out so please forgive me today if this is a little bit unusual of me not organizing my thoughts systematically.
Do we need to carry out retrenchment or VSS? Employees that get million ringgit separation from a company will have very little to complain - you have no right to complain. What about long service non-skilled employee with 20,000-30,000 settlement? What about middle management with young family with 3 - 5 years of service, they probably out of job with 12,000 to 30,000 max. What about non-skilled workers separated or retrenched with only 1,000 or 2,000 in their pockets? Those with housing or car loans will probably run out of cash in 6 months. Those with 200,000 - 300,000 package settlement will have longer stamina to get through the storm but who is going to employ a 45 or 50 year old person when the economy is normalized? The picture is not going look pretty.
The old Japanese solution was let's suffer together, take pay cuts - permanent or non-permanent such as no pay leave. Or do it the old Western way: sacrifice a few so that there are enough jobs for remaining ones.
Yea, Japanese theory is wonderful if we all been raised like the Jap accepting what ever it is. Considering Malaysians are getting more and more vocal, do you think they can accept these pay cut? Initial gratitude will soon evaporate if pro-longed. What is the incentive for me to work hard?
Back to American model. If I tell you a company is going to run out of cash in a few months, should you be retrenching or offer VSS? Will this alter your view? I believe there is little argument the company should go ahead with workforce reduction.
How do you feel if a company is reducing workforce that once in 25% pre-tax dropped to 3% pre-tax cause by the recession ? Yeah, the company has no problem of going-concern but it will add another 3% to the bottom line post-reduced work force. Market value may increase by another 10-15%. Will you do it? Will you listen to their argument that to attract investment and capital - a creative destruction is a necessity ?
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