SINGAPORE – ST Engineering has offered some employees the option of “early release”, the company said, responding to queries from The Straits Times.
“During the third quarter, we offered select employees to opt for early release, through a mutually agreed separation scheme in light of the sustained impact of Covid-19 on some parts of our business,” said a company spokesman.
“That was not a retrenchment exercise. Employees who did not accept the scheme were redeployed,” the spokesman said.
ST Engineering did not say how many employees were offered the scheme, or how many accepted the offer.
The company employs about 23,000 people worldwide.
The spokesman said the group was, and continues to be, impacted significantly by Covid-19 due to a drop in customer demand, supply chain challenges and workforce disruptions.
To stay viable as a business, ST Engineering has been implementing cost-saving measures to mitigate the impact of Covid-19, the spokesman added.
These measures include deferment of discretionary capital expenditure, tightening of operating expenditure, including staff and staff related expense, and cut in promotional expenses related to trade exhibitions and suspension of business travel.
The mainboard-listed company on Wednesday said it expects full-year revenue to be around 10 per cent lower for FY2020 than in FY2019, in a third-quarter business update.
This followed an announcement on Tuesday that ST Engineering will be restructuring into two main clusters from the new year – commercial, and defence and public security. It is currently organised according to sectors: aerospace, electronics, land systems and marine.
The spokesman on Thursday stressed that that the group’s reorganisation is not a cost rationalisation exercise, but a move to better position the company for global growth and success.
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